As the new year unfolds, Canadians can anticipate a range of changes in housing legislation at the federal, provincial, and local levels throughout 2024. From updated tax regulations to revamped urban planning policies, the upcoming months will witness the implementation of various housing laws and initiatives across the country. Many of these measures aim to address the pressing shortage of housing in both resale and rental markets.
Some important updates: Federal Updates | British Colombia | Alberta | Toronto's Updates
Here's an overview of the noteworthy housing policies set to shape 2024:
1. Short-term Rental Restrictions
In November 2023, the Government of Canada unveiled its 2023 Fall Economic Statement, which details new tax, spending and inventory-boosting measures. This includes new efforts to incentivise short-term rental operators to return properties to the long-term housing market.
Starting January 1st, 2024, income tax deductions will be denied for non-compliant short-term rental owners, emphasizing adherence to provincial or municipal licensing, permitting, or registration requirements. Learn more from the 2023 Fall Economic Statement here.
2. Pre-approved Home Design Catalogue
To boost construction of new home supply, the federal government intends to revive a post-Second World War housing policy of standardized, pre-approved home designs, making it easier and faster for developers to build new properties. The modern version of the catalogue will focus on creating blueprints for a variety of low-rise housing, and potentially higher-density homes and different forms of building construction, such as modular and prefabricated homes.
Consultations for the home catalogue are expected to start in January, 2024.
British Columbia
New Short-term Rental Housing By-laws
In late 2023, the provincial government introduced the Short-Term Rental Accommodations Act which imposes stricter regulations and enforcement on short-term rental housing. As of May 1st, 2024, the Act will require short-term rental hosts to display a valid business licence number on their listing in regions where a licence is required by the local government. Short-term rentals will be limited to the host’s principal residence, plus one secondary suite or accessory dwelling unit, in select communities.
Additionally, protections for ‘non-conforming use of property’ will no longer apply to short-term rentals. Later in the year, the British Columbia government will implement a short-term rental registry, and require rental platforms to share data with the Province.
Expanded Speculation and Vacancy Tax
The province has expanded its existing speculation and vacancy tax laws to 13 new communities, including Penticton, Courtenay and Kamloops. Homeowners in applicable regions will be required to declare how they used their property in 2024 for the first time in January, 2025.
Introduced in 2018, the speculation and vacancy tax is 2% for individuals who don’t pay the majority of their taxes in Canada, or 0.5% for Canadian citizens or permanent residents who pay the majority of their taxes in the country.
Updated Zoning Rules
New zoning laws are under consideration to deliver more small-scale, multi-unit housing across British Columbia. Under the proposed legislation, one secondary suite or one laneway home will be permitted in all communities throughout the province. In most areas within municipalities of more than 5,000 people, by-laws will also be adapted to allow three to four units on lots currently zoned exclusively for single-family or duplex residential, and permit six units on larger lots close to transit stops with frequent service.
Additionally, the new zoning rules would require municipalities to update community plans and zoning by-laws on a regular basis to ensure that there is enough housing for current and future residents. Changes to zoning by-laws will roll out across 2024.
Alberta
Interest on Security Deposits
Alberta landlords will be required to pay annual interest on security deposits they receive from their tenants. Effective January 1st, 2024, the interest rate payable on security deposits will be set at 1.6% under the Residential Tenancies Act and Mobile Home Sites Tenancies Act. Previously, security deposits did not incur interest.
Toronto's Updates
1. New Luxury Home Tax
Effective January 1st, 2024, the City of Toronto will enforce graduated Municipal Land Transfer Tax thresholds for high value residential properties. Previously, homes valued at $2 million or more would be subject to a MLTT rate, which is currently set at 2.5%. Going forward, additional thresholds have been established for homes priced between $3 million and $20 million, with the new rates set incrementally higher based on the value of the home.
2. Legalization of Rooming Houses
Otherwise known as multi-tenant homes, rooming houses will become legal in the City of Toronto starting March 31st, 2024, along with new regulations. Previously, rooming houses were not legal in some areas of the city. Under the new framework, Toronto rooming houses will be limited to a maximum number of rooms and parking, licensing requirements, and will be required to follow a compliance program. A multi-tenant house is defined as a building with four or more rooms that may have a shared washroom and kitchen.
3. Increase in Vacant Home Tax Rates
In 2023, Toronto introduced its first ever Vacant Home Tax (VHT), which requires homeowners to declare the occupancy status of their residence to the municipality each year. The VHT was implemented to increase housing supply in Toronto by encouraging the conversion of empty properties into occupied homes.The VHT has been increased from 1% to 3% for the 2024 taxation year, which will become payable in 2025.
The introduced federal policieas and localized initiatives in Toronto aim to address critical issues such as housing supply shortages and the dynamic nature of the real estate market.
As homeowners, buyers, and investors, these changes reflect a proactive approach to building a more sustainable and accessible housing market for all Canadians. Therefore, staying informed is key to making well-informed decisions in the ever-evloving real estate landscape.
If you're looking to navigate these changes or have questions about real estate, don't hesitate to reach out to us at Royal LePage Estate Realty in Toronto, Ontario, where "Helping You Is What We Do ™"
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Written by Michelle McNally - Communications Managers, Royal LePage
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