The government of Canada has released the Federal Budget 2024, which has a focus on Fairness for Every Generation, as a budget that “takes bold action to help build more homes…and will grow the economy in a way that’s shared by all Canadians.”

Following a series of housing announcements in recent weeks, the Canada Housing Plan released in Q2 2024, alongside the Canadian Federal Budget 2024, which details an ambitious set of housing initiatives aimed at tackling the housing crisis through increasing housing supply, helping homebuyers and renters, and supporting innovative solutions for real estate builders and developers.

TRREB’s Position

With the Federal Budget’s release, the Toronto Real Estate Board (TREB) applauds the slate of new real estate initiatives focused on increasing the Canadian housing supply; however, we urge caution on the impact of new tax measures that could also affect housing supply and affordability.

Among the new and previously announced measures, the 2024 Canadian Federal Budget aims to:

Increase the capital gains tax inclusion rate

The government is increasing the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds. Individuals will continue to pay tax on 50 per cent of any capital gains up to $250,000 per year. The new rules will apply to capital gains realized on or after June 25, 2024.

Selling your principal residence will continue to be exempt from capital gains taxation. TRREB will ensure we hold the government to this commitment.

Increase in Home Buyers’ Plan Limit:

The Home Buyers’ Plan (HBP) limit will increase from $35,000 to $60,000 for an individual or $120,000 for a couple, allowing first-time homebuyers to withdraw more from their Registered Retirement Savings Plans (RRSPs) for down payments, benefiting from the tax advantages of RRSP contributions.

Canadians withdrawing from their HBP between January 1, 2022, and December 31, 2025, will benefit from an extended repayment grace period, now up to five years, allowing them to better manage mortgage payments.

Extended Mortgage Amortization Periods:

The budget will introduce a provision for 30-year mortgage amortizations for first-time homebuyers purchasing newly built homes, starting August 1, 2024. This extension aims to make monthly mortgage payments more manageable.

Permanent Amortization Relief: 

Enhancements to the Canadian Mortgage Charter will include permanent amortization relief for existing homeowners meeting specific criteria, thus allowing them to reduce their monthly mortgage payments as needed.

Housing Accelerator Fund Enhancement:

An additional $400 million will be added to the Housing Accelerator Fund, raising its total to $4.4 billion, aiming to fast-track the construction of an additional 12,000 new homes over the next three years.

Canada Housing Infrastructure Fund:

A new $6 billion fund will support the construction and upgrading of essential housing infrastructure to facilitate more homebuilding activities. The government is looking to partner with provinces to deliver this funding, in addition to working directly with municipalities.

Support for Renters:

New measures for renters include launching a new $15 million Tenant Protection Fund, creating a new Canadian Renters’ Bill of Rights, and making sure renters get credit for on-time rent payments.

Making Your Home Cheaper to Heat and Easier on the Environment: 

To help Canadians lower monthly home heating costs, the government is reinvesting $903.5 million into a new Canada Greener Homes Affordability Program to support energy efficient retrofits for homeowners and renters with low- to median-incomes.

Combatting Mortgage Fraud: 

Government will be consulting with the mortgage industry on making a tool available through the Canada Revenue Agency to verify borrower income for mortgages. Income verification through the CRA is something TRREB has strongly advocated for in the past.

Investing in New Approaches to Homebuilding: 

Government is earmarking $50 million through Canada’s regional development agencies to support innovative housing projects, including those in modular housing, automation, and robotics.

Providing Low-Cost Loans to Prefabricated Housing Projects: 

Earmarking at least $500 million in low-cost financing is to be made available through the program for new apartments that use prefabricated or innovative homebuilding techniques.

Offering Low-Cost Financing for Homeowners to Add Additional Suites: 

Proposing a new Canada Secondary Suite Loan Program, delivered by the Canada Mortgage and Housing Corporation, will enable homeowners to access up to $40,000 in low-interest loans to add a secondary suite to their homes.

Accelerated Capital Cost Allowance Increase:

The federal government is increasing the post-tax Accelerated Capital Cost Allowance from 4% to 10% for purpose-built rentals. This will act as a major incentive for the construction of a new supply of purpose-build rentals.

In addition to these measures:

• The government intends to restrict the purchase and acquisition of existing single-family homes by large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.
• The government is also considering introducing a new tax on residentially zoned vacant land and will launch consultations later this year.
• The government intends to establish a subsidiary of the Canada Mortgage and Housing Corporation (CMHC) to deliver flood reinsurance.

The 2024 Canadian Federal Budget places a strong focus on enabling more housing supply; however, the Toronto Regional Real Estate Board (TRREB) will continue to monitor the potential impact of new tax measures on housing supply and affordability.

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Capital gains tax is a crucial aspect of financial planning, particularly in the Canadian real estate sector. With the recent changes introduced in Canada’s 2024 federal budget, it’s more important than ever to understand how these updates could affect your investments. Whether you’re a seasoned investor or just getting started, this guide will help you navigate the new landscape.

Key Federal Budget Capital Gains Measures

Increase in Capital Gains Tax Inclusion Rate

Effective Date: June 25, 2024

Change: The capital gains inclusion rate will rise from 50% to 66.67% for trusts and corporations. For individuals, this rate applies only to annual capital gains exceeding $250,000. Gains below this threshold will continue to be taxed at the previous 50% rate.

Impact: This change means a larger portion of your capital gains will be subject to income tax, increasing the tax burden on real estate investments and property sales. Additionally, gains on Canadian residential properties held for less than one year may be deemed business income, making them fully taxable unless an exception is met.

Increase to Lifetime Capital Gains Exemption (LCGE) for Entrepreneurs

Change: The LCGE will increase to $1.25 million from the previous $1.016 million for eligible capital gains, effective June 25, 2024.

Impact: If you’re selling shares of a qualified small business corporation (QSBC) or qualified farm and fishing property (QFFP), you can now benefit from a higher exemption limit, which can significantly reduce your tax liability.

Alternative Minimum Tax (AMT) Adjustments

Change: Adjustments to the AMT rules will align with changes in regular income tax calculations. The AMT is a parallel tax calculation with fewer credits, deductions, and exemptions compared to regular tax rules.

Impact: These adjustments mean that AMT considerations will become more critical in planning for capital gains realization and charitable contributions. It’s essential to strategize accordingly to optimize tax outcomes.

Canadian Entrepreneurs’ Incentive

Introduction: Starting in 2025, a new initiative will reduce the capital gains tax rate to one-third on up to $2 million of qualifying shares over an individual’s lifetime. This incentive specifically halves the prevailing inclusion rate for these gains.

Impact: This initiative aims to promote entrepreneurship by lowering the tax burden on qualifying share sales, providing significant tax relief for entrepreneurs.

Strategic Planning Considerations

Immediate Action

Evaluate the Benefits: Consider realizing capital gains before June 25, 2024, to take advantage of the current lower inclusion rate. This can help you optimize your tax efficiency under the existing regulations.

Consultation

Engage with a Tax Advisor: Given the complexity of these changes, it’s crucial to work with a tax advisor. They can help you navigate the new rules and develop strategies tailored to your specific financial situation.

Long-term Planning

Assess Implications: These changes will impact retirement planning, estate management, and future investment decisions. It’s important to reassess your long-term financial plans in light of these regulatory adjustments.

Key Takeaways

The 2024 federal budget introduces significant changes to capital gains taxation that will affect many real estate professionals and investors. Here’s a quick summary of the key measures:

1. Capital Gains Inclusion Rate Increase: More of your capital gains will be taxed, especially for high earners and corporations.
2. LCGE Increase: Entrepreneurs can now benefit from a higher exemption limit on eligible capital gains.
3. AMT Adjustments: Strategic planning is crucial to navigate the adjusted AMT rules.
4. Entrepreneurs’ Incentive: A new tax incentive for qualifying share sales starting in 2025.

Final Thoughts

As the landscape of capital gains taxation evolves, staying informed and proactive is essential. The changes introduced in the 2024 federal budget underscore the importance of strategic financial planning. By understanding these updates and consulting with professionals, you can better navigate the complexities of capital gains tax and optimize your financial outcomes.

Additional Resources

For more detailed guidance, visit the Government of Canada’s official site.

Remember, this overview is for informational purposes only and should not be considered as tax or legal advice. Always consult with a qualified professional before making any financial decisions.

Kind Regards,

Sean Findlay, B.A., Realtor
Award-Winning Sales Representative
Office Phone: 905.450.8300 | Mobile Phone: 289.236.2462

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Source: Toronto Real Estate Board (TRREB): Condo Prices Remain Flat in Q1 2024
TORONTO, ONTARIO, April 30, 2024 – The Greater Toronto Area (GTA) condominium
apartment sales increased moderately in the first quarter of 2024 relative to the first three
months of 2023. However, over the same period the number of condo apartment listings
increased by a greater annual rate. With buyers benefitting from more choice, the average
condo selling price edged lower.

Total condominium apartment sales amounted to 4,747 in Q1 2024 – up by 5.3 per cent on a
year-over-year basis. New condo listings were up by more than 23 per cent over the same
period.

“TRREB’s consumer polling, conducted by Ipsos, suggests that many renter households will
have no more patience for rent increases before they consider purchasing their first home. Once
interest rates start trending lower, look for condo sales to pick up as more first-time buyers enter
the market,” said TRREB President Jennifer Pearce.

The average condominium apartment selling price in the GTA was $693,754 in Q1 2024 – down
by one per cent compared to $700,704 in Q1 2023. In the City of Toronto, which accounted for
almost two-thirds of total condo sales, the average selling price was $723,186 – down by 0.5
per cent compared to Q1 2023.

“As first-time buying activity increases with lower borrowing costs later this year and into 2025,
inventory will be absorbed and market conditions will tighten. Increased competition between
condo buyers will result in upward pressure on selling prices,” said TRREB Chief Market Analyst
Jason Mercer.

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Q1 Toronto Condo Rental Market Statistics 2024

The number of condominium apartment rental transactions reported through TRREB’s MLS^® System was up on a year-over-year basis by 19.7 percent in the first quarter of 2024 to 12,541. The number of rental listings was also up over the same period, but by a greater annual rate of 51 percent.

“As the population continues to grow in the Greater Toronto Area (GTA), it is no surprise that the demand for rental units is increasing. At the same time, people looking to rent a condo apartment over the past few quarters are benefitting from increased inventory, which has moderated rental price increases,” said TRREB President Jennifer Pearce.

The average rent in Toronto for a one-bedroom condominium apartment dipped by 1.2 percent to $2,441 in the first quarter of 2024. Over the same period, the average two-bedroom rent in Toronto remained unchanged at $3,139.

“While the inventory of available condo units in Toronto has increased over the past year, the majority of these units will be absorbed as the number of new GTA households continues to grow. Looking forward, the Toronto Real Estate Board (TRREB) expects to see an increasing number of renters making the move into homeownership over the next year, as borrowing costs start to trend lower, thereby narrowing the gap between rent and mortgage payments,” said TRREB Chief Market Analyst Jason Mercer.

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The condominium apartment market has become much more balanced over the past year. While Q3 2023 condo apartment sales were up year-over-year, growth in listings far outstripped growth in sales. The result was the average price edging lower providing some relief in the face of higher borrowing costs.

There were 4,415 condominium apartment sales reported through Toronto’s TRREB MLS^® System in Q3 2023 – up 6.2 percent when compared to the same quarter in 2022. Over the same period, new condo apartment listings were up by a much greater 28.8 percent.

“The condominium apartment market is an important entry point into homeownership for first-time buyers. A better-supplied market has led to more choices for these buyers, resulting in more negotiation power and lower selling prices on average. A pause in price growth has helped mitigate the impact of higher monthly mortgage payments,” said TRREB President Paul Baron.

In the third quarter of 2023, the average selling price for a condominium apartment GTA-wide was $716,145 – down slightly compared to $720,628 in Q3 2022. In the City of Toronto, which accounted for approximately two-thirds of condo apartment sales, the average selling price was $736,566 – down from $750,087 in Q3 2022.

“While condo market conditions have become more balanced over the past year-and a-half, we will likely start to see a tightening in the market in the second half of 2024. The GTA population is growing at a record pace and the consensus view is that we will start to see some relief in terms of borrowing costs beginning in 2024 and even more so in 2025,” said TRREB Chief Market Analyst Jason Mercer.

Click Here To View Full Toronto Condo Market Q3 2023 Report

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Location & Desirability: Boasting the most coveted waterfront address in Burlington, Nautique embodies the epitome of desirability. Its panoramic views of the lake and close proximity to the city’s pulse make it the most sought-after location for discerning homeowners.

Once-in-a-Lifetime Incentives: Prepare to be astounded by the exceptional offerings during this limited-time sale. Prospective homeowners can avail themselves of up to $100,000 off condo suites, unprecedented 3.5% mortgage interest rates, a year of complimentary maintenance, zero development fees, and a host of additional incentives.

Luxurious Living Experience: Nautique is more than a residence; it’s a lifestyle statement. Immerse yourself in lavish amenities, from state-of-the-art fitness centers to serene rooftop terraces, all crafted to elevate the resident experience. The exquisite finishes and breathtaking vistas redefine the meaning of luxury living.

Testimonials & Community Experience: Residents and visitors alike sing praises of Nautique’s unparalleled ambiance and community spirit. The warmth and camaraderie among neighbors foster an enviable sense of belonging, enriching the overall living experience.

How to Participate in the Sale: Securing your slice of Nautique’s luxury is simple. Contact our dedicated team to schedule a visit, explore available units, and seize the opportunity to be a part of this exclusive weekend sale. Act swiftly to ensure you don’t miss out on these extraordinary incentives.

In Conclusion, Don’t Miss Out: Nautique Lakefront Residences stands as a testament to unrivaled luxury in Burlington. With its upcoming exclusive weekend sale on December 9 & 10, 2024, don’t let this chance slip by. Embrace the epitome of opulent living and make Nautique your haven of sophistication and tranquility.

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Jaw-Dropping Incentives:

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How to Secure Your Spot:

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The index, which monitors home prices across 11 CMAs based on observed or registered sales at least twice, experienced a 0.4% drop on a seasonally adjusted basis between September and October. Before seasonal adjustments, there was a 1% slip in September (following a 1.3% decrease the month before), signifying the second consecutive monthly decline.

Teranet and National Bank attribute these declines to a broader slowdown in the resale market. They point to rising interest rates, worsened affordability concerns, and a less vibrant job market as key factors contributing to this shift.

Market conditions have relaxed nationwide, resulting in an increase in the months of inventory to 4.1 in October. Although this level mirrors pre-pandemic figures, it remains lower than the historical norm, according to a press release accompanying October’s report.

While the composite index presents a weighted average of observed or registered home prices in various Canadian cities, specifically Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montreal, Quebec City, and Halifax, Teranet and National Bank track prices in a total of 31 Canadian cities. Of these, 58% experienced some degree of softening in home prices.

Toronto (-1.6%), Edmonton (-1.2%), Vancouver (-1.1%), Ottawa-Gatineau (-1.1%), Saint John (-5.3%), Trois-Rivières (-3.3%), and London (-2.5%) saw month-over-month declines in home prices, whereas Montreal (+3.7%), Halifax (+1.1%), Winnipeg (+1.0%), Moncton (+4.6%), Kingston (+3.8%), and Peterborough (+2.6%) recorded increases.

The press release anticipates further price declines in the upcoming months, citing persistently high interest rates and a less favorable economic context as challenges for the sector, despite the historical demographic growth.

On a year-over-year basis, the index showed a 2.8% increase last month. This rise was attributed to gains in Halifax (+12.5%), Victoria (+6.5%), Quebec City (+6.3%), Moncton (13%), and Sherbrooke (9.4%). Conversely, Edmonton (-3.6%), Ottawa-Gatineau (-0.5%), London (-2.1%), and Barrie (-0.9%) experienced declines in home prices compared to the previous year.

Written By: Realtor Sean Findlay

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When it comes to high-rise condo buildings popping up in Ontario, cities like Toronto, Mississauga, Hamilton, and Ottawa might come to mind as hotbeds of activity. Pickering, a city 40 km east of Toronto with a population of less than 100,000, typically doesn’t — but maybe it should.

The first phase of an extensive new master-planned community, dubbed Pickering City Centre, launched its sales on September 13, bringing 513 pre-construction condo units to the market. Within a week, 95% of them had sold.

Jacob Truglia, Partner and Vice President Business Lead for CentreCourt Developments, the developer behind the project, said signs of heightened interest for condos in the Pickering area started rolling in before the sales took off.

“We had a launch event last week and there were about 2,000 realtors in attendance, so we thought that was a great sign in terms of overall interest in the project,” Truglia told STOREYS. “But I will say, the outcome that we had here of being close to sold out in a week has surpassed our own expectations of this, so we’re very happy with how that came together.”

Planned for the 55-acre site of the Pickering Town Centre mall, the master-planned community, once complete, will have at least 10 high-rise towers reaching up to 55 storeys and housing more than 6,000 residential units, as well as retail, office, and commercial space. It will also feature parks, urban plazas, a new City Hall, and a direct connection to the Pickering GO station. As to be expected, it’s a multi-phase endeavour that will be rolled out over several years.

Although Pickering might not be the average person’s choice to make such a large development investment, Truglia says CentreCourt identified the city’s market as one that’s been “overlooked for years.” A combination of a growing population and a constrained supply has led to high demand. 

“There hasn’t been a lot of activity in that market save for a few developers,” Truglia said.

But of course, the scale and offerings of Pickering City Centre are unlike anything the city has ever seen, and that doesn’t hurt either.

“We have Pickering Town Center, which is a staple in the community, so that’s 700,000 sq. ft of retail at your doorstep, and there’s a 130,000-sq.-ft office building, a direct connection to the Pickering GO, and we’re directly beside Highway 401, so if you look at the Pickering landscape, this is the best location and it’s really rare to have an opportunity to be at centre ice at the scale of a 55-acre master plan where you can really redefine it as a new downtown,” Truglia said.

He also points to the competitive price point of the condos, which have sold at $1,050 per sq. ft, as another big draw for buyers. A similar-sized condo in the area, Truglia says, would cost about $100 more per sq. ft.

CentreCourt’s success comes at an interesting time when many developers in the Greater Toronto Area have chosen to postpone, cancel, or sell development projects as they struggle with lower buyer demand amid higher interest rates and overall affordability concerns.

“It’s definitely a more challenging market right now than it has been,” Truglia said. “But I think what this shows is when you have the right ingredients, a good story, a belief and a vision, and are able to offer it all at an attractive price point, there are still buyers out there — they’re just looking and being selective with the opportunities that they ultimately choose to purchase.”

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