Trudeau orders to introduce stricter rules for investment properties

According to Canada’s housing minister, the federal government plans to take stricter measures concerning investment properties in order to cool down real estate prices.

The main information about the plans was provided in the mandate letter from the prime minister to housing minister Ahmed Hussen.

The marching orders to Hussen included preventing Canadians from excessive buying of income properties by changing rules on down payments and implementing measures aimed at reducing “excessive profits.”

Restraining the wave of investment properties purchases and flipping, discouraging foreign investors from keeping their homes vacant are also in the list.

He pointed that the government plans to differentiate usual landlords from large housing trusts that own hundreds of properties as a passive investment and don’t care if they are vacant.

“The main goal is to decrease the speculative demand and cool these skyrocketing prices,” – Hussen added.

According to the Canadian Real Estate Association’s forecast, the national average home price will have grown by 21.2% annually to $687,500 by the end of this year.

High home prices, especially in Toronto and Vancouver, made political parties promise several measures for improving housing affordability.

The government’s latest economic update included a 1% tax on foreign-owned vacant homes. Finance Department says it will bring in $200 million during the 2022-2023 fiscal year.

Hussen says other measures the Liberals would like to introduce are beyond their reach and will require working with provinces and territories.

They include, for instance, a ban on blind bidding or the right to a home inspection before you buy a property.

“In my opinion, in order to overcome what I sometimes consider unreasonable opposition to affordable housing, we need to have a national discussion,” – Hussen noted.

“These plans are well thought and supported, but I notice that sometimes we face NIMBYism, and it’s disappointing.”

Hussen said he’ll be waiting for feedback on the government’s plans when he talks to provinces, cities and housing providers during a summit at the start of 2022.