Canada's Finance Minister, The Hon. Bill Morneau, has announced measures related to the housing market.
Specifically, the government announced the following:
- Measures intended to enhance fairness by closing a tax loophole that the government believes is being exploited by foreign buyers.
- Measures to address long-term housing affordability. A mortgage rate stress test will now be applied to all new mortgages that are insured. The new test is intended to ensure that home buyers can realistically afford to pay their mortgages should interest rates rise.
Additional details are available at the Finance Department's website here.
CREA has indicated that it is encouraged that the government has taken a restrained approach, in line with what CREA has recommended. CREA noted that "other instruments at the federal government's disposal are far blunter and would potentially damage markets which are not on their radar screen or are, in fact, struggling."
CREA will continue to meet with the government as this file evolves with a goal to underscore that Canada is made up of many housing markets, not only those in large cities, and that current and future efforts must reflect that reality.
TREB is closely monitoring this issue and working to ensure that all levels of government make informed decisions on options, if any, for market interventions.