The Liberal Party has secured a fourth term—this time under new leader Mark Carney—and while it’s another minority government, the implications for the mortgage and housing markets are meaningful. From tax reform to housing incentives, there’s plenty for mortgage professionals and borrowers to watch closely.

1. GST Removed for First-Time Buyers on New Homes Under $1M

One of the most tangible impacts for new buyers: the removal of GST on new homes priced under $1 million for first-time buyers. This could save buyers up to $50,000 on a $950,000 home, significantly improving affordability in high-priced markets of Ontario.

Mortgage Implication: Expect a surge in demand for new builds under the $1M threshold, especially from first-time buyers. Get pre-approved early in your home-buying journey.

2. $25B in Housing Investment = More Inventory (Eventually)

The Liberals plan to inject over $25 billion in affordable housing development, including partnerships with private and non-profit developers.

Mortgage Implication: While this won’t ease supply constraints overnight, it signals more long-term inventory, which could gradually cool home price growth and improve housing choice for buyers locked out of today’s tight market.

3. Fiscal Stimulus May Delay or Moderate Rate Cuts

The proposed $77 billion in new fiscal spending (equal to 2.5% of GDP) includes infrastructure and tax cuts. While supportive of the economy, it may slow the Bank of Canada’s pace of rate cuts by adding inflationary pressure.

Mortgage Implication: Be prepared for continued rate volatility. Rate holds and pre-approvals are a strategic move heading into renewals or purchases.

4. Tax Changes Could Boost Investor Activity

The Liberals plan to cut the lowest personal income tax bracket by 1% and roll back capital gains inclusion increases—potentially benefitting investors, especially those holding real estate portfolios.

Mortgage Implication: Expect renewed interest in rental and investment property financing. This may create competitive situations as seasoned investors and new entrants are attracted by tax efficiency.

5. Mild Recession Still Possible—But Shorter

While stimulus may soften the blow, economists still predict a mild recession, with rising deficits and debt levels. That said, housing-related spending could buffer job losses in construction and real estate.

Mortgage Implication: Now is a good time to look at refinancing, debt consolidation, and switching lenders to improve cash flow. A proactive strategy could help weather short-term economic uncertainty.

Final Takeaways

This Liberal win comes with a new fiscal playbook: big spending, targeted housing relief, and moderate tax cuts. For the mortgage market, this means more opportunities—especially for first-time buyers and investors—but also a continued need for strategic advice in a still-uncertain rate environment.

Reach out if you have any questions, or want to review your situation together.