Category Archives: politics

Liberals could help millennials buy homes

Real estate sales are good for the economy, but what happens when prices get too high for young family incomes and borrowing costs increase?

Perhaps it’s time for the Government to step in?

Finance Minister Bill Morneau said earlier this week Ottawa is exploring measures to make home ownership affordable for more millennials, a generation made up of people who are now in their mid-20s to late-30s.

Morneau didn’t elaborate on what options he’s considering, but Canadians could learn more in the coming weeks when he releases an election-year budget that will also lay out Liberal platform commitments.

Major political parties have already started positioning themselves on the complex area of housing affordability. It will likely emerge as an important campaign issue ahead of October’s federal election, and the challenges of millennials and first-time buyers could attract a lot of attention.

Some lenders have ideas for some helpful changes:

“There’s a lot of folks that just don’t qualify to purchase anymore at the bottom end of that ladder,” said Paul Taylor, president and CEO of Mortgage Professionals Canada.

Taylor said the stress tests have succeeded in taking some of the froth out of the market and he believes the time has come for Ottawa to loosen them. In recent meetings with federal officials, he said he has recommended the reintroduction of insurance on 30-year amortization mortgages as a targeted way to help people at the lower end.

The coming weeks would be a good time for some changes with the busy spring season is approaching, he said.

“If we have another cool spring market, that’s going to have serious knock-on effects to the economy,” said Taylor, who was encouraged by Morneau’s comments.

Read the full article here.

CRA Freezing and Seizing Tax Cheat Assets

The CRA is now using ‘proceeds of crime’ provisions to freeze assets and seize property of tax cheats.

Tassé said the proceeds-of-crime provisions can also be used to seize property outside of Canada. For example, if the CRA believes that someone has engaged in offshore tax evasion and used the proceeds to buy a vacation home or a yacht, the CRA could freeze or seize those assets.

Using the proceeds-of-crime provisions also can block tactics used by some tax evaders, such as declaring corporate bankruptcy to avoid paying the taxes, said Tassé.

Read the full article here.

BC Tables Speculation Tax on Vacant Second Homes

Will a new tax on vacant homes help solve the affordability crisis?

The speculation tax will apply to those who own multiple properties in Metro Vancouver, the Capital Regional District (excluding the Gulf Islands and the Strait of Juan de Fuca), Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack and Mission.

The tax will apply at a reduced rate in 2018, based on property owned as of Dec. 31. It expands in 2019 to 0.5 per cent of assessed value for B.C. residents, one per cent for Canadians from outside B.C., and two per cent for non-Canadians.

Owners are exempt if they rent their properties for at least six months a year. And there is also a tax credit for B.C. residents with second homes valued under $400,000.

James pointed to exemptions she said will make the tax fair, including for people facing medical emergencies, people who have to relocate suddenly for a job, seniors who enter care homes, people undergoing a separation, and those with disabilities.

“If people choose to leave their homes vacant where the housing crisis is the deepest, we are asking them to pay their fair share. All that revenue will be returned to British Columbians in the form of affordable housing,” said James.

Read the full article here.

Legal rent increase to be reduced?

A BC government panel recommends reducing the maximum legal rent increase to help deal with the housing crisis:

The recommendation tries to strike a balance between renters struggling to keep up with rent increases and landlords who need to maintain their properties, Mr. Chandra Herbert told reporters Monday.

While some groups had called for a rent freeze, the task force decided that wasn’t a fair approach, he said.

“We tried to stake a bit of a middle path between those views – one that will allow increased affordability for people, as well as an ability to maintain properties,” Mr. Chandra Herbert said.

“We don’t want to lose rental properties in this province when for so many years, there was no focus on building them,” he added.

Read the full article here.

Vancouver BC is “making room”

In a city with outrageous house prices, more than half the land is zoned as ‘single family’ housing. This leaves very little in the range between very high density mini condo towers and expensive family homes.

Many older cities have addressed this issue with mid density housing including row homes, and it looks like Vancouver is ready to follow suit:

More specifically, the proposal instructs planners to “bring forward policies for RS and RT zones that allow triplexes, quadplexes and other multi-unit formsto significantly bring down the purchase cost per unit of housing in low density neighbourhoods.”

It also recommends setting maximum dwelling unit sizes, reducing parking and setback requirements, eliminating design guidelines, and offering density bonuses for projects that provide community benefits. The city has embarked on an 18-month process to develop and adopt the full program.

Read the full article here.