Throughout the month of April, the federal government made several announcements regarding housing in Canada and introduced the 2024 Budget.
The Canadian Real Estate Association (CREA) is conducting ongoing analyses of these policies to understand both the impact to REALTORS® and the Canadian housing and real estate market.
Here are a few of the important things REALTORS® should know about what’s been announced.
Canada’s Housing Plan
On Friday, April 12, 2024, the federal government announced Canada’s Housing Plan, the first articulation of a “systems” approach to housing and home building – through skills, financing, home building methods, reducing approval barriers, and infrastructure tied to housing.
It’s an ambitious plan that acknowledges and aims to address housing affordability and supply across the continuum, something REALTORS® have been encouraging for years.
“Canada’s housing challenges have been building over many years and no one group can tackle it on their own. REALTORS® across Canada have been advocating for a collaborative, multi-faceted approach for years. We’re ready to play our part,” said Janice Myers, CREA’s CEO, following the announcement.
For nearly 40 years, CREA has engaged elected officials and government to discuss solutions and make recommendations on behalf of REALTORS®. We’re pleased to see Canada’s Housing Plan reflects many of the recommendations we’ve put forth over the years to help address the challenges and needs facing Canadian property buyers, sellers, and renters.
We applaud today’s release of “Canada’s Housing Plan” – the federal government’s comprehensive, multi-pronged approach to addressing Canada’s housing crisis.
The scope and ambition of this plan is encouraging, as is the first articulation of a “systems” approach to housing and…
— CREA | ACI (@CREA_ACI) April 12, 2024
The government proposes to increase housing supply by:
- Introducing an Accelerated Capital Cost Allowance for apartments.
- Expanding the removal of federal taxes (GST) for rental housing.
- Increasing the annual limit for Canada Mortgage Bonds.
- Providing low-cost loans to build apartments for the middle-class.
- Making the Apartment Construction Loan Program easier and faster to use.
- Launching Canada Builds, a team Canada approach to building affordable homes for the middle class, including on under-utilized public lands across the country.
- Building homes on top of shops and businesses.
- Launching a Historic Public Lands for Homes Plan.
- Modernizing housing data.
- Offering low-cost financing for homeowners to add additional suites.
- Further incentivizing density to existing homes.
- Investing in Indigenous housing and infrastructure.
- Supporting Indigenous people living away from their communities in urban, rural, and Northern areas.
- Helping municipalities legalize housing and streamline approvals.
- Attaching housing conditions on public transit funding.
- Building the necessary infrastructure to support growing communities.
- Leveraging the Canada Infrastructure Bank.
- Implementing an industrial strategy for home building.
- Introducing a standardized housing design catalogue.
- Scaling up new tech to build new homes.
- Investing in new approaches to home building.
- Providing low-cost loans to prefabricated housing projects.
- Simplifying the way Canada builds homes.
- Making building codes digital.
- Training the next generation of skilled trades workers.
- Improving labour mobility to connect more people to opportunity.
The government proposes to make it easier for Canadians to rent or buy a home by:
- Launching a Tenant Protection Fund.
- Creating a new Canadian Renters’ Bill of Rights.
- Leveraging rental payment history to improve credit scores.
- Extending mortgage amortizations for first-time buyers buying newly built homes.
- Strengthening the Canadian Mortgage Charter.
- Leveraging the Tax-Free First Home Savings Account.
- Increasing the Home Buyers’ Plan withdrawal limit.
- Extending the grace period to repay Home Buyers’ Plan withdrawals.
- Making home cheaper to heat, and easier on the environment.
- Helping municipalities enforce regulations limiting short-term rentals.
- Removing tax deductions for certain short-term rental operators.
- Extending the ban on foreign home buyers.
- Combatting mortgage fraud.
- Cracking down on real estate fraud.
- Confronting the financialization of housing.
The government proposes to help Canadians who can’t afford a home by:
- Providing $1 billion for the Affordable Housing Fund to build affordable homes.
- Launching a new Rapid Housing Stream.
- Making the Affordable Housing Fund easier to use.
- Launching a $1.5-billion Canada Rental Protection Fund.
- Launching a new Co-operative Housing Development program.
- Keeping non-profit and co-op homes affordable.
- Introducing more supports to address homelessness.
- Reducing homelessness faster.
- Addressing encampments and unsheltered homelessness.
- Ending homelessness for veterans in Canada.
- Sheltering asylum claimants.
- Funding culturally relevant services, shelter, and transitional housing.
2024 Budget
On Tuesday April 16, 2024, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, tabled the fourth budget of the 44th parliamentary session, Fairness for Every Generation, a budget they say is heavily focused on building “a Canada that works better for you, where you can get ahead, where your hard work pays off, where you can buy a home—where you have a fair chance at a good middle class life.”
Budget 2024 is for you — our younger generation of Canadians. Our plan is delivering fairness for every generation by building more homes, faster, making life cost less, and creating more good jobs and economic growth. pic.twitter.com/xVoYtszFgh
— Chrystia Freeland (@cafreeland) April 18, 2024
The majority of the housing measures reflected in Budget 2024 were announced prior to the introduction of the budget, accumulating in the Canada’s Housing Plan announcement.
These are the new housing related measures announced in Budget 2024:
- The government will consider introducing a new tax on residentially zoned vacant land and will launch consultations later this year.
- The government intends to increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024.
- The government intends to establish a subsidiary of the Canada Mortgage and Housing Corporation (CMHC) to deliver flood reinsurance.
- The government intends to restrict the purchase and acquisition of existing single-family homes by very large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.
- The government is exploring new measures to expand access to alternative financing products, like halal mortgages.
Capital Gains
While CREA applauds the federal government’s “all hands on deck” approach to tackling Canada’s housing crisis, there are potential concerns with the proposed changes to the capital gains inclusion rate. Over the coming weeks, CREA will be actively analyzing the implications of these announced measures.
We’re particularly interested in its potential impact on REALTORS®, their clients, and housing supply. To this end our Economics team is undertaking data analysis; our Government Relations team is engaged in stakeholder outreach with both internal and external groups; and we’ll be fielding a member survey to gather feedback from a representative sample of REALTORS®. This approach will ensure our understanding is thorough, and any subsequent actions are well-informed and effective.
In addition, the latest budget explicitly restated the exemption for capital gains from the sale on principal residences has been maintained. We will vigorously hold the government to this commitment.
Further information about these points will be communicated as it becomes available.
