In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on…
In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on CityNews 95.7 and CityNews 101.1, the guys talk about the provincial budget and what incentives will and will not succeed in helping first-time home buyers get into the housing market.
Mortgage 101 with Clinton Wilkins & Todd Veinotte: What will help first-time home buyers?
Don’t feel like watching the video? Check out the transcript below.
We’re recording in the lobby for this show!
Todd Veinotte: [00:00:00:02] So thanks so much for tuning in and listening to everybody. Of course, we’ve got listenership in Ottawa as well as Halifax, and we really appreciate everybody’s valuable time. We were chatting before, we started recording tonight. By the way, we’re in new digs here. We moved. We’ve moved within your office, right?
Clinton Wilkins: [00:00:17:15] Yeah. So for those of you who really want to see where we’re at, we’ll put a couple photos up here on social media and you can certainly check it out on our Facebook and Instagram or on Twitter. And, you know, you can kind of see where we’re at in the office. You can see what we look like. And we’ve relocated a little bit because today the sun was shining. And let me tell you, it was blazing hot in my office.
Todd Veinotte: [00:00:38:14] In your office, yeah.
Clinton Wilkins: [00:00:39:05] Yeah, blazing, blazing hot. So we’ve relocated out here. We’re actually out here in our lobby and we’re watching the cars go by. We are watching people walk by here on the street. You know, we’re right on the corner of Hollis and George Street, right in downtown Halifax.
Todd Veinotte: [00:00:54:10] Nice. So where I was going with this is we were chatting just before we started recording in the new part of the office here, which is really, I like this better, by the way. I think it should be a permanent move. What do you think?
Clinton Wilkins: [00:01:03:08] Well, you know what? As long as the cleaners don’t want to come in and, you know, disturb us while we record. We also put a couple posters up on the door. So maybe I’ll do one of these. You know, like “X” don’t come in if I see anybody coming.
We get many first-time clients because of the radio show
Todd Veinotte: [00:01:15:21] So where I was going with this is I asked you, do you get many people, do you get a lot of feedback from the radio show? And you said emphatically, yes.
Clinton Wilkins: [00:01:26:07] I can tell you of anything that we do, and, you know, we do lots of media, we do TV and we do radio and we do lots of stuff online and in print. The one thing that people always tell me, they say, “Clinton, I heard you on the radio.”
Todd Veinotte: [00:01:39:27] Yeah.
Clinton Wilkins: [00:01:40:20] And you know, there’s a lot going on in the world Todd, and I don’t want to discount that everything is just rainbows and unicorns out there. But I can tell you, I think a lot of people are listening to CityNews right now.
Todd Veinotte: [00:01:51:21] Yeah. I agree.
Clinton Wilkins: [00:01:53:06] And, you know, they want to see what’s going on with COVID. They want to know what’s going on with the Ukraine. They want to know what’s going on with inflation and the Bank of Canada. And, you know, we’re there and we’re having those conversations.
And I think that’s really, really valuable. And, you know, obviously there’s a lot going on with the housing market as well. You know, spring is typically one of the busiest markets of the year. So I think we’ll probably have some people tuning in here this weekend.
Increase to deed transfer tax for non Nova Scotia residents
Todd Veinotte: [00:02:15:03] All right. So while we’re on the in the news kind of segment, let’s talk a bit about the recent provincial budget and a couple of pretty big impactful things here. So for those who don’t know any of you, what are some of the, at least one of the things you wanted to talk about was this transfer tax?
Clinton Wilkins: [00:02:30:07] Yeah. So the deed transfer tax is now going to be increased for any residents outside of Nova Scotia that are buying properties that will not be occupied by a Nova Scotian.
So it’s a move that was done by the provincial Tory party that are currently in government here in the province of Nova Scotia. And, you know, they’re trying to make sure that the homes, second homes, properties, are being occupied by Nova Scotians. You know, we’re in a housing crisis here in Nova Scotia, just like many other areas from across the country, there’s not enough supply.
So it’s something that they’re doing to obviously generate some revenue and they are planning on putting the revenue that they’re generating off of this and off of increased property taxes and put this into some housing initiatives. And, you know, we need it, Todd. We need it.
You know, I think in some ways this might be, you know, taxing the rich and, you know, that it’s going to be popular and it’s going to be unpopular. I think there’s lots of ways to potentially generate these funds. And this is something that’s been done in other provinces. In P.E.I. already, for years, they were charging extra property taxes for people who lived outside of the province. I can tell you in New Brunswick, if it was a rental property, it was double property tax.
Todd Veinotte: [00:03:55:14] It still is.
Clinton Wilkins: [00:03:56:01] And, you know, in Ontario and B.C., they put measures in place and they’re working on measures to make sure that properties are occupied. So, you know, Nova Scotia is doing lock step. I would say we probably have one of the most aggressive policies that have been put forward. It’s going to impact that the transfer tax, but also the property tax. And it’s effective April 1st. So it’s already it’s already in place.
The hope is the extra tax will free up some supply?
Todd Veinotte: [00:04:17:18] So is it in part to dissuade, potentially, people from buying properties and not living in properties? Is that what it’s for?
Clinton Wilkins: [00:04:26:05] Yeah, I think that’s really why. So like for example, if you buy a rental property. Yeah. And you have you rented to Nova Scotians, you’re cool. That’s not going to impact you.
Todd Veinotte: [00:04:33:23] Yeah.
Clinton Wilkins: [00:04:34:17] But I think it’s really meant to maybe make buyers from outside of the province, but also outside the country really think twice to be like, you know, what do I want to buy this property? Is it going to soften the market, Todd? No.
Todd Veinotte: [00:04:50:11] Probably not.
Clinton Wilkins: [00:04:50:24] I don’t think so.
Todd Veinotte: [00:04:51:21] Why do you say that?
Clinton Wilkins: [00:04:52:17] You know, if you’re going to buy a cottage here in Nova Scotia, that’s already a luxury item. You can afford to pay a couple of bucks more.
It might, though., and this is what’s interesting: Let’s say that you’re somebody who lives outside the province and you’ve had a second home here for years and it’s paid off. But you’re retired person with a fixed income. You might decide to put that home up for sale. It may put some more supply into the market.
And it’s really hard to know what will happen. But the government is planning on making tens of millions of dollars off of these measures. And those funds that they’re going to generate, they’re planning on putting these back into housing initiatives that will help, potentially, lower income and other maybe developers get more housing stock on online, which we obviously do need.
What about waiving deed transfer tax for first-time home buyers?
Todd Veinotte: [00:05:40:28] First-time home buyers, there’s a liberal MLA, Lorelei Nicoll, I actually talked to her on my radio show on CityNews 95.7 and she’s floating the idea for first-time home buyers having the deed transfer tax, which is 1.5 per cent exempt. Pushback from some municipalities, because that would impact their revenue. But what are your thoughts on that?
Clinton Wilkins: [00:06:02:20] I don’t know if it’s a massive roadblock for first-time home buyers, to be honest.
Todd Veinotte: [00:06:06:11] How much is it generally like five grand?
Clinton Wilkins: [00:06:09:00] It all it all depends on what the purchase price.
Todd Veinotte: [00:06:12:27] On a $500,000 purchase.
Clinton Wilkins: [00:06:13:15] You’re talking like $7,500.
Todd Veinotte: [00:06:15:01] Well, that’s significant.
Clinton Wilkins: [00:06:16:17] It is certainly significant. And I don’t know if that will make a difference between helping or hindering the market, maybe making it, you know, even a more heated. I don’t know if that’s a big enough barrier to entry that is keeping first-time home buyers out of the market.
One thing that I do think that’s going to impact, and I did some lobbying with Mortgage Professionals Canada with MLAs, no sorry MPs from across the country and across kind of our region. We re talking about housing issues that are impacting Nova Scotians and obviously people who live in this region. And one of the issues that we really talked about was around the first-time home buyers incentive. And I know, Todd, we talked extensively about that.
What about increasing amortisation for first-time home buyers?
It really, I think, worked well in Nova Scotia and Atlantic Canada early on when it was first rolled out. But the federal government has actually only dispersed about 30 per cent of the funds that they had earmarked for this first-time home buyers incentive. And one thing that we were really lobbying these MPs about was say, “Hey, let’s ditch this first-time homebuyers incentive and let’s change the maximum amortisation to 30 years.”
Todd Veinotte: [00:07:26:15] Just for first time?
Clinton Wilkins: [00:07:27:09] Just for first-time home buyers. I think that will give first-time home buyers that extra level of affordability that they need, Todd.
Todd Veinotte: [00:07:33:16] That’s significant.
Clinton Wilkins: [00:07:34:09] And you know what? I’m not against first-time home buyers getting the deed transfer tax waived. I’m not against it. I’m not against it. But I don’t know if that is the barrier to entry. I think affordability over the long run is more and more important to them.
Todd Veinotte: [00:07:47:13] Much of a difference, and again, I know it depends on the mortgage and all that stuff, might that make 30 years to 25 years?
Clinton Wilkins: [00:07:53:02] You know what? It’s actually can make a significant difference, you know, in terms of what the affordability is. I think it’s between, you know, 10 or 15 per cent potentially more first-time home buyers can get into the market.
See you in the next segment!
Todd Veinotte: [00:08:05:14] So we get quite a bit of time left in the show, and we’re going to talk about, what do you want to get to for sure?
Clinton Wilkins: [00:08:11:16] We’re certainly going to talk about refinance. I know there’s a lot of existing home owners that are listening to our show and listen to our show all the time. So we really do love that. We’re going to talk about refinance. Certainly more refis are being done this spring than have ever been done before.
Todd Veinotte: [00:08:24:04] Your Guide to Homeownership with Clinton Wilkins and myself, Todd Veinotte returns after this.
If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.