A look at the 2022 Federal budget and it’s impact on Ottawa real estate.

• Building
  • About $6.5 billion in money allocated to increasing supply long term.
  • Multi-generational renovation tax credit for a secondary unit.
    • Long term these initiative should help increase supply.

 

• Tax-Free First Home Savings Account
  • Allows first time home buyers to save up to $40,000 in a tax free account. Contributions are tax deductible and withdrawals are not taxed.
    • This program will stimulate demand.
• Double the first time home buyer’s tax credit to $10,000. This will provide up to $1,500 in direct support to first time home buyers.
  • This program will increase demand.

 

• Anti -flipping and banning foreign investment.
  • Full tax on properties held for less than one year. (Taxed as business income and not capital gains.)
  • 2 year ban on foreign investment in non-recreational, residential real estate.
    • Both these initiatives are relatively weak and will not have a significant effect on the Ottawa real estate market.
    • This may not be the case for others markets in Canada such as Toronto and Vancouver.

 

In summary, the 2022 federal budget will not have a significant immediate effect on the Ottawa real estate market. Long-term demand will increase due to the tax free savings account and hopefully we will see housing supply increase as well.

The most important factor that will impact the market in the next year will be mortgage rates. The Bank of Canada is set to increase rates another 1-2% this year. This will have the most significant effect on demand.

 

I am always happy to answer any real estate related questions you may have.

 

Kind regards,

 

Kiril Peev

Email: kiril@sutton.com / www.kirilpeev.ca

Sales Representative / Sutton Group – Ottawa Realty / Brokerage, Independently Owned and Operated

Hintonburg – Orleans – Kanata

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