With the October 21 federal election around the corner, real estate boards across Canada are calling on all federal parties to significantly alter B-20.
“In its current form, the stress test in the GTA adds about $700 a month to the average mortgage, which is a good chunk that could be used for daycare or a car payment, and to add that burden on a family when they’re trying to buy a house is too much,” Toronto Real Estate Board President Michael Collins told MortgageBrokerNews.ca. “We think there is some benefit to the stress test, but we’d like to see it reduced so that it’s more prudent.”
In addition to TREB, boards from Calgary, Vancouver and Quebec, representing some 90,000 realtors, are calling for 30-year amortizations, replacing the $750 First-Time Home Buyers Tax Credit with a $2,500 non-refundable tax credit for Canadians buying their first homes, and adjust the stress test according to economic headwinds and interest rate environments.
Collins added that the boards would like to B-20 implemented regionally rather nationally.
“Again, we’re not totally against the stress test, but the one-size-fits-all approach—essentially what’s good for one market must be good for others—needs to be revised,” he said. “A 30-year amortization for properties would create better environments for Canadians trying to buy houses.”
Montreal might have Canada’s hottest real estate market, but, using 2016 Census data, the provincial homeownership rate (61%) is below the national average (70%), according to a statement from the Quebec Professional Association of Real Estate Brokers.
“We believe there needs to be better support offered to buyers of residential properties, particularly first-time buyers,” QPAREB’s President and CEO Julie Saucier said in the statement. “We also support the implementation and maintenance of home renovation tax credit programs to encourage the purchase of properties requiring upgrades, a refund of transfer duties for first-time buyers, and the introduction of mortgage rules that are adapted to regional and provincial differences.”
The real issue, says Collins, is adequate housing supply has been obstructed, notably by red tape, but he’s encouraged by the Ontario and Toronto municipal governments’ acknowledgement of the problem.
“At the centre of the problem it was a supply issue and people were looking to buy homes without there being enough product out there,” he said. “And [B-20] was brought in to offset that, but that shouldn’t have been the focus.”