The Canadian election is over, and the country’s leadership remains largely unchanged. However, a laundry list of election promises means big changes to real estate are coming. Most of the promised plan seeks to create more demand for housing, which softens price drops. Expect more of the same currently being done, but with a revamped buying and selling process. Here are some of the promises the Liberals are proposing under the “Home Buyer’s Bill of Rights”
• Banning bidding wars – Sellers would be required to tell buyers the dollar amounts of competing offers on properties. Currently, most bids on homes are “blind,” meaning buyers are unaware what others are offering to pay
• Ban foreign buyers from buying residential properties for two years
• A new tax-free savings account for first-time buyers
• Establishing a legal right for buyers to conduct home inspections
• An anti-flipping tax if the property is sold within 12 months of purchase
• The pricing history of properties to be made public
• Lenders to give mortgage deferrals for up to six months if a homeowner loses their job
• Realtors would be required to disclose if they are representing both buyer and seller (double-representation situations are seen as potential sources of conflict of interest)
• 25% lower rates on CMHC mortgage insurance
•Renovictions – slap a tax on what they deem excessive rent increases where landlords oust tenants to renovate units and jack up the rent
• To build, preserve or revitalize nearly 1.4 million homes over four years
• Investing $4 billion in a new Housing Accelerator Fund for municipalities
• Pledging $1 billion in loans and grants to develop a new rent-to-own program between landlords and renters
Most of these measures are regulated at the provincial level currently. It’s unclear how the Liberals would push through the majority of changes because real estate law falls under provincial and territorial jurisdiction.
For example, the industry is super duper upset about a ban on the blind bidding process. The implementation at the federal level would require criminalizing the process. Regardless of whether you’re in favor of the ban or not, going over provincial territory isn’t easy.
This brings us to our last point — these are promises, not definitive plans. A lot can change between now and implementation, especially if home prices weaken.