Dec 17, 2021
Home Economics: Mortgage stress test maintained; Home office tax deduction extended
Fiscal update a 'missed opportunity' to address affordability: Ontario Finance Minister
Canada’s banking regulator and the federal finance department decided to keep the mortgage stress test unchanged (instead of making it tougher) – meaning homebuyers will still have to show they can handle their mortgage payments at a minimum rate of 5.25 per cent. The decision came on the heels of data from the Canadian Real Estate Association that national home prices surged 25 per cent in November compared to last year.
Foreign homebuyers ban back in the spotlight
Speaking of house prices…multiple levels of government are now considering taking extra steps to calm the frenzied market. Prime Minister Justin Trudeau has tasked Housing Minister Ahmed Hussen with developing more measures to calm the housing market, including a temporary ban on non-recreational home sales to foreign buyers. Just days prior, the Ontario government put the feds on notice that it would move to strengthen its own non-resident homebuyers ban if the feds failed to take action.
Achieving your financial dreams will require flexibility
Home prices, inflation, a pandemic – what does this mean for Canadians, especially young people, in reaching their financial goals? CTV Chief Financial Commentator Pattie Lovett-Reid wrote in her latest blog that it’s all about finding that extra flexibility in your finances. She and Manulife Bank CEO Rick Lunny give their best advice on how consistently embracing that flexibility can have a big impact on your household spending in the long term.
Canadians increasingly donating stocks to charity
Have you ever considered donating some of your portfolio holdings to charity? Canada Helps, which works with 86,000 charities across the country, says securities donations have jumped by 52 per cent in the past year. Donating securities to charity is mutually beneficial: For the investor, it can lower your tax burden. For the charity, it gives them financial support at a time when fundraising activities have been hampered by the pandemic while demand for their services has gone up.
Feds extend home office tax deduction
One of the things you might’ve missed in the federal fiscal update is that the government revealed it’s extending the Home Office Expense Deduction for the 2021 and 2022 tax years. Not only will remote workers be able to use the simplified rules for deducting home office expenses, but the temporary flat rate will be increased to $500 annually, from the original $400.
Consumer prices once again rose at their highest level in nearly two decades. Statistics Canada reported inflation in November rose at a 4.7 per cent annualized pace.
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