Introducing ‘Halal Mortgages’ in Canada’s 2024 Budget: What You Need to Know

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“Imagine buying a home without the burden of interest – that’s the promise of ‘halal mortgages’ proposed in Canada’s 2024 federal budget. This initiative aims to provide Muslim Canadians and other diverse communities with alternative financing options, paving the way for increased participation in the housing market. But what exactly are halal mortgages and why are they significant? Let’s take a closer look.

## Unveiling Canada’s 2024 Budget

Canada’s 2024 budget outlines a plan to introduce ‘halal mortgages’ as a means to empower marginalized communities in accessing homeownership. The government is considering changes in tax treatment and regulatory measures to facilitate the implementation of these alternative financing products.

## Understanding Halal Mortgages

Traditional mortgages involve the payment of interest, which is prohibited under Islamic law. Halal mortgages adhere to Sharia principles by offering payment structures that exclude interest. Three common types of halal mortgages include ijara, Musharaka, and Murabaha.

– **Ijara**: Functions as a rent-to-own model where the bank purchases the asset and leases it back to the customer, with payments contributing to both the capital and the financial institution’s profit.
– **Musharaka**: Involves a partnership between the financier and the customer, with shared ownership of the property until equity is transferred.
– **Murabaha**: Operates as a credit system where the ownership is immediately transferred to the customer with profit included in the final offer.

## Implications for Homebuyers

Due to their riskier nature, halal mortgages can be more expensive than traditional interest-based loans, deterring major banks in Canada from offering them. This lack of accessible halal financial options has left many Muslim Canadians seeking alternatives from smaller firms to fulfill their housing aspirations.

In conclusion, the introduction of halal mortgages in Canada signifies a step towards financial inclusivity and diversity in the housing market. By accommodating the needs of various communities, the government aims to bridge the gap in homeownership opportunities. As we await further details on this initiative, it’s crucial to acknowledge the importance of providing equitable financial solutions for all Canadians.”



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