policy
06. policy
While no new provincial or federal housing policies were rolled in Q 4 2019, the City of Vancouver approved two notable tax increases for 2020, the federal government is looking to boost housing affordability, and central banks are weighing their next move. Each of these is considered below.
CITY OF VANCOUVER APPROVES A PAIR OF TAX HIKES
As we moved deeper into the month of December, the 2020 property tax picture became evermore clear for municipalities throughout Metro Vancouver as councils approved their budgets for the coming year. While all municipalities raised the amount each of its households would pay in taxes in 2020 vs 2019—for context, Surrey raised residential rates by 2.9%, Pitt Meadows by 4.0%, and Richmond by 6.3%—the spotlight shone brightest on the City of Vancouver,
who voted to raise taxes by 7% (a more modest outcome following some initial backlash at the idea of a 9.3% hike). Additionally, the City of Vancouver’s Empty Homes Tax—which is separate from the provincial government’s Speculation & Vacancy Tax—will rise from 1% to 1.25% next year, impacting as it will owners who do not reside in their home, or rent it out on a long-term lease, for at least 6 months over the course of a year. Additionally, both the Conservative and the NDP kicked tires during their recent election campaigns on extending the maximum allowable mortgage amortization period for first-time homebuyers from 25 years to 30. Directionally, these changes—if implemented and depending on their ultimate scale—will provide additional support for demand in markets across the country, including here in Metro Vancouver. All of that said one should expect the impacts to be marginal at best.
AN EXPANSION TO THE FIRST-TIME HOME BUYERS’ INCENTIVE COMING SOON? To little fanfare, the federal Liberals returned to government in a minority position
following October’s election. Though their mandate has been weakened, the Liberal government is considering ways to expand the reach of the First-Time Homebuyers’ Incentive—at least in some more expensive markets like Vancouver and Toronto—from the current rules that limit total qualifying household income to $120,000.
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