New Federal Budget Includes Real Estate Related Measures
The federal government has tabled a new budget and it includes several measures related to real estate markets, home buyers, and home sellers. TRREB is conducting a detailed analysis of these budget measures and will be providing additional details. In the meantime, below is an initial summary of some measures announced in the federal budget.
TRREB Statement Regarding Budget
TRREB is encouraged that the federal government made housing issues a priority in the budget it announced today. Homeownership and healthy real estate markets continue to be key to the economic success of Canada and Canadians. The budget measures targeted at creating affordable housing and helping current homeowners to make their homes more efficient and livable, are especially important. With regard to the planned tax on foreign non-resident, non-Canadian owned vacant, or underused residential properties, TRREB is watching this issue closely to determine what the actual impact of foreign investment in the real estate market is and if this tax is an effective measure to assist with supply. We look forward to providing input to parliament on this and other issues.
The following measures were announced in the federal budget on April 19, 2021:
- Tax credits to encourage home energy efficiency retrofits
- Budget 2021 proposes to provide $4.4 billion to the Canada Mortgage and Housing Corporation (CMHC) to help homeowners complete deep home retrofits through interest-free loans worth up to $40,000. Loans would be available to homeowners and landlords who undertake retrofits identified through an authorized EnerGuide energy assessment. This program will also include a dedicated stream of funding to support low-income homeowners and rental properties serving low-income renters, including cooperatives and not-for-profit owned housing.
- The program would be available by summer 2021. It is estimated that more than 200,000 households would take advantage of this opportunity.
- Examples of deep retrofits to make our homes greener:
- Replacing oil furnaces or low-efficiency systems with a high-efficiency furnace, air source heat pump, or geothermal heat pump.
- Better wall or basement insulation and/or wall or roof panels. Installing a high-efficiency water heater or on-site renewable energy like solar panels.
- Replacing drafty windows and doors.
- National foreign-owned vacant or underused property
- Budget 2021 announces the government's intention to implement a national, annual 1 per cent tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, effective January 1, 2022.
- In the coming months, the government will release a consultation paper to provide stakeholders with an opportunity to comment on the parameters of the proposed tax, which TRREB looks forward to participating in.
- Assistance to businesses
- Budget 2021 proposes to extend the Canada Wage Subsidy, the rent subsidy, and Lockdown Support until September 25, 2021. It also proposes to gradually decrease the rates for the wage subsidy and the rent subsidy, beginning July 4, 2021, in order to ensure an orderly phase-out of the programs as vaccinations are completed and the economy reopens.
- Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked or hiring more staff. This support would only be available for active employees and will be available from June 6 to November 20, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy.
- Funding to municipalities to create affordable housing
- Budget 2021 provides funding to municipalities for various affordable housing programs targeted at vulnerable individuals.
The measures announced in the budget do not take effect until the federal budget is approved by the House of Commons. TRREB is conducting a detailed review of the budget and will provide more details on the above initiatives as they become available.