On Tuesday of last week, the federal government announced some new housing measures that are aimed at helping homeowners, especially those looking to add a little extra income with secondary suites, while also tackling some of the bigger housing challenges Canada is facing. We’re talking new taxes, refinancing options, and plans to repurpose underused federal properties. So, let’s dive into what all this means for homeowners like you.
Easier Refinancing for Secondary Suites
If you’ve ever thought about turning that empty basement or unused garage into a rental suite, this one’s for you. One of the most exciting changes is the recent municipal zoning reform that makes it easier to refinance your mortgage to fund these kinds of projects. This is made possible through Housing Accelerator Fund agreements.
Here’s the deal: you can now access up to 90% of your home’s value, including the value of that future rental suite, through refinancing. This means more cash in hand to get your renovations going!
On top of that, you can now stretch the loan out over 30 years. Longer amortization = lower monthly payments, which is always a win. Oh, and if you’re worried about mortgage insurance limits holding you back, don’t be. The government has bumped the mortgage insurance limit up to $2 million, so homeowners in pricier markets won’t get left behind.
As Deputy Prime Minister Chrystia Freeland said, “We’ve got to use every tool in the box to make housing more affordable for Canadians.” And this is definitely one of those tools!
Tax on Vacant Land to Spur Development
Now, onto the vacant land tax. If you’re sitting on some unused land, the government is about to give you a nudge to do something with it. The idea here is simple: introduce a tax on vacant land to push landowners into developing residential properties, instead of just letting the land sit there.
The feds are working with local governments to figure out how this could work in different areas. So, don’t be surprised if you start hearing more about it from your local city hall.
To take advantage, Canadians can participate in consultations with municipalities and the federal government to help shape the implementation of vacant land taxes, ensuring fair regulations while incentivizing new development in local communities.
Repurposing Federal Properties for Housing
Last but not least, the government is making more federal properties available for housing development. We’re talking about 14 new properties, from places like Ottawa to Cape Breton. These properties will join the Canada Public Land Bank, which already has 70 spots ready to be turned into homes.
Public Services and Procurement Minister Jean-Yves Duclos summed it up nicely: “We’re unlocking public lands for housing at a pace we haven’t seen in generations.” Translation: they’re serious about tackling the housing crisis and creating more affordable housing options across the country.
In conclusion, the federal government’s new housing measures represent a significant step towards addressing Canada’s housing challenges. By making it easier for homeowners to build secondary suites, taxing vacant land to encourage development, and unlocking federal properties for housing, these initiatives aim to increase housing supply, improve affordability, and create stronger communities. For homeowners, these changes provide new opportunities to maximize their property’s potential, generate additional income, and contribute to the solution for Canada’s housing crisis. Together, these measures reflect a proactive approach to making housing more accessible and affordable for Canadians, now and in the future.
As we continue to navigate this unpredictable journey of interest rates, our commitment to your financial success remains steadfast. Whether rates rise or fall, the Bank of Canada rate cut impact on mortgages will influence your decisions. Partnering with a knowledgeable mortgage broker like Mortgage With Mike will empower you to make informed decisions in this evolving landscape. Your mortgage is a fundamental aspect of your financial future, and it’s essential to ensure it’s built on solid ground.
Get in touch with us today to discover how we can assist you on your journey to homeownership.