INCENTIVES
The federal government plans to incentivize the building of rental and affordable housing.
Part one of the plan is spending an additional $1-billion over three years. This money will support co-op housing, non-profit, and public housing providers, which will help fund 7,000 new affordable homes by 2028, says the government.
Part two is increasing the loan funding available under the government's Apartment Construction Loan Program by $15-billion. This increase will go toward low-cost loans that will support the building of rental apartments and the construction of an additional 30,000 homes.
Part three bolsters a government program set up in 2022, which supports the development of co-op housing, providing people and low income families with affordable housing. The program's budget, currently sitting at $190-million from 2022, will be allotted an extra $309.3-million.
An added perk for co-op housing corporations that provide long-term rental accommodation would make them eligible for the removal of GST on new rental housing.
CRACKING DOWN
The government plans to crack down on Airbnbs and short-term rentals not complying with regulations.Canada needs more long-term housing for Canadians to live in, and the federal government is taking action to crack down on these short-term rentals which are keeping homes for Canadians off the market," the government says.
The 2023 Fall Economic Statement announces that the federal government intends to deny income tax deductions for expenses incurred to earn short-term rental income, including interest expenses, in provinces and municipalities that have prohibited short-term rentals. It was also announced that the federal government intends to deny income tax deductions when short-term rental operators are not compliant with the applicable provincial or municipal licensing, permitting, or registration requirements.
These measures would apply to deny all expenses incurred on or after January 1, 2024.
The government is also earmarking $50-million over three years to support municipal enforcement of these restrictions on short-term rentals.
HELP
Help is on the way for Canadians concerned about increasing mortgage payments. A Canadian mortgage charter announced in the fall economic statement would support people at risk of losing their homes because of high interest rates. It would impose on banks and other mortgage lenders an expectation that they would help people struggling with the high cost of repayments.The charter is largely a summary of existing rules. It is aimed at reminding consumers of their rights when renegotiating mortgages in periods of higher interest rates.
Mortgage holders in financial difficulty on their principal residence can expect to receive fair, reasonable, and timely mortgage relief measures from their federally-regulated financial institutions, which are expected to proactively reach out to vulnerable borrowers and make full use of available tools to quickly and efficiently support borrowers through difficult times.
THE CANADIAN MORTGAGE CHARTER
Canadians can expect:
1. Allowing temporary extensions of the amortization period for mortgage holders at risk;
Canadians can expect:
1. Allowing temporary extensions of the amortization period for mortgage holders at risk;
2. Waiving fees and costs that would have otherwise been charged for relief measures;
3. Not requiring insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal;
4. Contacting homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;
5. Giving homeowners at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and,
6. Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
The government also said it would monitor mortgage lenders’ compliance with the relief measures.
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