Explainer: Canada’s proposed Home Buyers’ Bill of Rights

A breakdown of the government’s new housing plan

The Liberal Party of Canada announced a promise for a Home Buyers’ Bill of Rights to combat the housing affordability crisis. (Flickr/Cathy)

The Liberal Party of Canada announced a promise for a Home Buyers’ Bill of Rights to combat the housing affordability crisis. (Flickr/Cathy)

The Liberal Party of Canada announced a promise for a Home Buyers’ Bill of Rights, meant to combat the housing affordability crisis that Canada is facing. 

The plan intends to build upon existing provincial and federal laws to create a unified bill that will ensure that the real estate market focuses on home buyers, particularly first-time home buyers. The bill was proposed alongside other measures meant to address housing affordability across the country.

The plan includes a foreign buyer ban, and a two-year ban on non-Canadians from purchasing homes in Canada. Refugees, international students working towards permanent residency, and those on work visas will still be able to purchase homes.

The new bill proposes giving buyers a legal right to a home inspection. This is intended to ensure that a home purchase comes without any potentially expensive surprises and that any renovations or repairs that a home may need are taken into account in the price of the home. These are distinct from home appraisals, which are a more general examination focused on determining the home’s value.

The bill will also require real estate agents to disclose when they are involved in both sides of a potential sale to all participants in a transaction. This is primarily to expose conflicts of interest and to ensure that the real estate agents are acting in the best interest of a buyer or seller. Currently, provincial legal frameworks exist in British Columbia and Alberta, but this new bill will make a comprehensive federal law to avoid jurisdictional limits.

Price transparency will make it so that home buyers can see the prices that a home has sold for, making it easier to see if a price is overly inflated for a negligible difference in the house itself. This should also help combat the issue of purchasing over value, which can have major effects on a buyer’s ability to pay the mortgage.

The plan also includes a clause requiring up to six months of mortgage deferrals in the case of job loss or other major life events. This is currently a major concern for people living paycheque to paycheque, where an injury that prevents a person from working could result in eventual homelessness. 

In terms of purchasing, the plan will require mortgage brokers to act in the buyer’s interest, which includes informing them of the First-Time Home Buyer Incentive

This is important as many first-time buyers miss out on available programs because they were not explained or advertised to them. These programs, such as the existing Home Buyers’ Plan and the Home Buyers’ Amount tax credit, have the potential to get buyers into homes months or even years earlier than planned.

Additionally, the plan will open a beneficial land ownership registry, which will remove the current issue of ‘hidden’ land ownership, such as through a trust or corporation. This will help home buyers know exactly who they are buying from and combat money laundering as per an investigation in 2019

“By helping our young people unlock homeownership, we will grow the middle class and keep moving Canada forward for everyone,” reads the Liberal Party’s website.