|Finance Minister Freeland delivered the Fall Economic Statement on November 30. The main areas on which the Statement impacts the rental housing sector include the following:
No new taxes on rental investments: Our sector has been increasingly concerned that the government may seek to increase capital gains taxes and/or impose interest deductibility limitations on rental housing. Such measures would be hugely negative impacting the supply and affordability of rental housing and ultimately harm both current and future renters. Advocacy will continue to be necessary to ensure the government does not consider either of these measures in the future.
Energy subsidies: The sum of $2.6B is being allocated to help 750,000 homeowners make energy-efficient improvements to their homes. Over the coming months, the government will outline details of a low-cost loan program that integrates and builds on available energy audits and grants, and which can be easily accessed by Canadians. This will be of particular interest to landlords in the secondary market.
Rental Construction Financing Initiative (RCFI): The government has announced an additional $12B of loan support for new rental construction under the Rental Construction Financing Initiative (RCFI) over the next seven years to support the construction of an estimated 28,500 additional rental units. The money will all be in the form of loans at a favourable interest rate based on the interest rate paid by the Government of Canada. Rental developers need to meet affordability targets, energy efficiency targets and accessibility requirements. This is a very positive move for the broader rental housing ecosystem.
Expansion of the First Time Homebuyers Program: This existing incentive program is a shared equity mortgage that allows eligible first-time home buyers to lower their mortgage payments by sharing the cost of buying a home with the government. In exchange, the government shares in the equity growth. Housing is a system and the ability to transition to home ownership for those who are able to do so creates more opportunities for renters and landlords alike by contributing to a healthier rental housing ecosystem.