Borrowing RRSP funds to buy a home would no longer be restricted to first-time buyers under a Liberal government, the party announced today.
Liberal leader Justin Trudeau has proposed that restrictions on the Home Buyers’ Plan (HBP) be loosened to allow greater access to the program for those facing challenging or unexpected circumstances.
“We will modernize the existing Home Buyers’ Plan so that it helps more Canadians finance the purchase of a home,” says the Liberal’s housing policy. “We will allow Canadians impacted by sudden and significant life changes, such as job relocation, the death of a spouse, marital breakdown, or a decision to accommodate an elderly family member, to access the program and use money from their Registered Retirement Savings Plan to buy a house without tax penalty.”
The plan would not change the maximum withdrawal limit of $25,000, however. Some call that a mistake as the HBP has failed to keep pace with rising home values. Since the HBP started in 1992, home prices have rocketed over 200%, while the withdrawal limit has risen just 25%. That’s the very reason Conservatives recently promised to raise it to $35,000.
“I think our proposal to extend the capacity to invest — to draw from your RRSPs…responsible amounts to help the cost of a new home — is something that will help Canadians in concrete ways,” he was quoted as saying. “The reality is that too many Canadians cannot afford to buy a house.”
Like the Conservatives, the Liberals are also promising to “undertake a review of escalating home prices in high-priced markets — like Vancouver and Toronto — to determine whether speculation is driving up the cost of housing, and survey the policy tools that could keep home ownership within reach for more Canadians.”