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New Housing Measures Announced
This morning, Premier Kathleen Wynne announced a comprehensive package of housing reforms, ahead of next weeks provincial budget aimed at cooling the GTA housing market. The release can be found here. The announcement follows extensive media coverage about the serious concerns with the over-heating markets.
Mortgage Professionals Canada has been engaged with the Ontario government and many MPPs through our lobbying activities and our recent Queens Park Advocacy Day. We are pleased to see measures that will increase supply, improve data collection and curb speculation within the market place, which we have been asking the government to do.
However, we are disappointed that there is no additional support for first-time buyers in this package, and we suggest caution that a foreign buyer tax will not have the desired impact that the government seeks.
We will be studying the comprehensive package of measures in greater detail over the coming days and will continue to engage with the government to ensure the interests of our members are heard at Queens Park.
What was announced:
1.Introducing legislation that would, if passed, implement a new 15-per-cent Non-Resident Speculation Tax (NRST) on the price of homes in the Greater Golden Horseshoe (GGH) purchased by individuals who are not citizens or permanent residents of Canada or by foreign corporations.
2. Expanding rent control to all private rental units in Ontario, including those built after 1991.
3. The government will introduce legislation that would, if passed, strengthen the Residential Tenancies Act to further protect tenants and ensure predictability for landlords.
4. Establishing a program to leverage the value of surplus provincial land assets across the province to develop a mix of market housing and new, permanent, sustainable and affordable housing supply.
5. Introducing legislation that would, if passed, empower the City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage property owners to sell unoccupied units or rent them out, to address concerns about residential units potentially being left vacant by speculators.
6. Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province.
7. Introducing a targeted $125-million, five-year program to further encourage the construction of new rental apartment buildings by rebating a portion of development charges.
8. Providing municipalities with the flexibility to use property tax tools to help unlock development opportunities.
9. Creating a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.
10. The province will work to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.
11. Working with the real estate profession and consumers, the province is committing to review the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.
12. Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market.
13. Educating consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
14. Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
15. Making elevators in Ontario buildings more reliable by establishing timelines for elevator repair in consultation with the sector and the Technical Standards Safety Authority (TSSA).
16. Working with municipalities to better reflect the needs of a growing Greater Golden Horseshoe through an updated Growth Plan.
Mortgage Professionals Canada
First-Time Home Buyer Incentive now available
The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.
The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada. It offers:
5% or 10% for a first-time buyers purchase of a newly constructed home
5% for a first-time buyers purchase of a resale (existing) home
5% for a first-time buyers purchase of a new or resale mobile/manufactured home
The Incentives shared-equity mortgage is one where the government has a shared investment in the home. As a result, the government shares in both the upside and downside of the property value.
By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.
The homebuyer will still have to repay the Incentive based on the propertys fair market value at the time of repayment. If a homebuyer received a 5% Incentive, they would repay 5% of the homes value at repayment. If a homebuyer received a 10% Incentive, they would repay 10% of the homes value at repayment.
The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.
Ask me for more information.