Recently the Feds and the Province of BC released their Financial Budgets.
How does this impact local market housing?
FEDERAL BUDGET
- NO change to Capital Gains Tax
- A national, annual 1% 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.
- $4.4 billion for homeowners to make deep home retrofits through interest-free loans worth up to $40,000. Examples of deep retrofits include:
- 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.
- Conditions for the GST New Housing Rebate, which entitles home buyers to recover 36% of the GST paid on the purchase of a new home priced up to $350,000, are being relaxed. It would now be available if the new home is acquired for use as the primary place of residence of any one of the purchasers or a relation of any one of the purchasers.
- $2.1 million over two years to support the implementation of a publicly accessible corporate beneficial ownership registry by 2025.
- To tackle the issue of housing supply, Budget 2021 proposes to advance and reallocate $1.3 billion through the National Housing Co-Investment Fund and the Rental Construction Financing Initiative, including for the conversion of vacant commercial property into housing.
- $63.8 million to Natural Resources Canada, Environment and Climate Change Canada and Public Safety Canada to work with provinces and territories to complete flood maps for higher-risk areas.
PROVINCIAL BUDGET
- The $2billion investment in the BC HousingHub (see below article) was confirmed.
- Homes for BC progress was outlined - this excerpt is from the Affordable Housing backgrounder
Homes for B.C. is working to put the Province on the path to address the lack of affordable homes and stabilize the real estate market. Of the 30 points in the original plan, 16 have been completed and progress is underway on 14 more. The progress includes key measures like:
- Getting more than 26,000 units of housing built or in progress in communities all over the province.
- Updating the Residential Tenancy Act to improve security for tenants facing eviction.
- Reducing the maximum annual rent increase to 2% and closing the loophole landlords used to get around rent controls.•Increasing the foreign buyers tax to 20%.
- Introducing the speculation and vacancy tax, which targets empty properties in high-demand areas and has helped put homes back on the rental market.
- Creating the Land Owner Transparency Registry to end hidden ownership in real estate.
- Cracking down on tax evasion in condo presale assignments through the Condo and Strata Assignment Integrity Register.
So far, the Province has taken steps on more than half of the actions in the plan to build the homes that people need, crack down on tax fraud, close loopholes, help stabilize the real estate market and build partnerships for affordability in every B.C. community.