Canada To Launch ‘Halal Mortgage’ For Muslim Homebuyers

In a move to make home ownership more accessible to all Canadians, including those adhering to Islamic financial principles, the Canadian government, led by Prime Minister Justin Trudeau, has announced plans to explore halal mortgages. This announcement came during the unveiling of the 2024-25 federal budget on Parliament Hill in Ottawa, with Finance Minister Chrystia Freeland by Trudeau’s side on April 16, 2024.

The budget presentation detailed the government’s intention to engage with financial service providers and diverse community groups to understand and possibly expand the range of financial products available in Canada. This includes halal mortgages, which are designed to comply with Islamic laws that prohibit the payment of interest, considering it usurious. The government is considering introducing changes in the tax treatment of these products and possibly creating a regulatory sandbox to foster innovation in financial services while ensuring consumer protection.

In addition to financial inclusivity measures, the Trudeau government has also extended its policy on foreign ownership of Canadian residential properties. Originally set to expire in 2023, the moratorium on the purchase of residential properties by foreign investors, both individuals and corporations, is now extended until January 1, 2027. This decision aims to keep the housing market accessible to Canadian citizens and permanent residents, preventing these properties from becoming speculative assets for foreign investors.

Deputy Prime Minister and Finance Minister Chrystia Freeland highlighted the fiscal challenges and opportunities in the budget, projecting a $39.8 billion deficit for the fiscal year 2024-25. The budget includes $53 billion in new spending over the next five years, targeting generational fairness and support for renters and first-time homebuyers, particularly among Millennials and Generation Z. To balance this new spending, the government has introduced “tax fairness measures,” anticipated to generate an additional $18.2 billion in revenue over the same period.

This budget reflects the Trudeau administration’s continued commitment to a fair and inclusive housing strategy and economic stability, emphasizing support for diverse financial practices and ensuring that younger Canadians have the opportunity to own homes and secure their financial futures.