As we step into 2024, the Canadian real estate landscape is poised for significant changes, with new housing legislation set to reshape the market. For home sellers, staying informed and adapting to these changes is crucial. Whether you’re a seasoned REALTOR® or a first-time home seller, understanding the implications of these legislative shifts will be key to navigating the 2024 real estate market successfully. As always, Royal LePage remains committed to providing expert guidance and insights to help you make informed decisions in this evolving landscape.
Let’s have a look at some of the key housing policies and regulations coming into effect in 2024.
Federal Policies:
Short-term Rental Restrictions
A major development in the 2023 Fall Economic Statement by the Government of Canada is the introduction of stringent measures for short-term rental operators. Starting January 1st, 2024, income tax deductions will be disallowed for properties not adhering to provincial or municipal licensing and registration requirements. This move aims to transition short-term rentals back into the long-term housing market, addressing the shortage in the resale and rental segments. For home sellers, this could mean a shift in market dynamics as more properties become available for long-term occupancy. Read more about the 2023 Fall Economic Statement on the Royal LePage Website.
Pre-approved Home Design Catalogue
In an effort to expedite new home construction, the federal government is reviving a post-Second World War initiative: a catalogue of standardized, pre-approved home designs. This modern iteration will include blueprints for low-rise housing and potentially higher-density homes, embracing modular and prefabricated construction methods. Consultations for this innovative catalogue are set to begin in January 2024. For realtors and home sellers, this could signify a faster and more efficient home-building process, potentially easing the supply crunch.
Toronto’s New Measures
New Luxury Home Tax
Effective January 1st, 2024, Toronto will implement new Municipal Land Transfer Tax (MLTT) thresholds for high-value residential properties. Homes valued between $3 million and $20 million will face incrementally higher MLTT rates, a significant change from the previous flat rate for homes over $2 million. This graduated tax system could influence the luxury real estate market, potentially impacting selling strategies and property values in Toronto’s high-end segment.
Legalization of Rooming Houses
Starting March 31st, 2024, rooming houses, or multi-tenant homes, will become legal throughout Toronto, subject to new regulations. These include limits on the number of rooms, parking, licensing requirements, and a compliance program. This legalization could open new opportunities for home sellers and realtors in Toronto, offering alternative housing solutions in a market grappling with affordability and availability.
Increase in Vacant Home Tax Rates
Following the introduction of the Vacant Home Tax (VHT) in 2023, Toronto has announced an increase in the VHT rate from 1% to 3% for the 2024 taxation year. Payable in 2025, this hike aims to encourage the conversion of vacant properties into occupied homes to increase the housing supply. For home sellers, this could mean re-evaluating strategies for holding and selling properties, especially those that are not their primary residences.
The upcoming housing legislation in 2024 presents a mixed bag of challenges and opportunities for Canadian home sellers. The federal government’s focus on increasing housing supply through innovative measures like the pre-approved home design catalogue, coupled with stricter regulations on short-term rentals, signals a significant shift in the real estate landscape. In Toronto, the new luxury home tax, legalization of rooming houses, and increased vacant home tax rates are set to redefine the market dynamics.
Remember, these legislative changes are not just about compliance; they represent a broader effort to create a more sustainable, accessible, and efficient housing market in Canada. Embracing these changes can lead to more strategic selling approaches, potentially yielding better outcomes in your real estate endeavors.
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