The Quebec Federation of Real Estate Boards (QFREB) recently submitted four proposed tax measures to the province’s Minister of Finance as part of Quebec’s pre-budget consultations. The measures include introducing a tax credit for the purchase of a first home, maintaining and improving the LogiRénov tax credit, adjusting transfer taxes in order to reflect the significant increase in property prices and expanding the Home Buyers’ Plan (HBP).
“Given the importance that real estate has on Quebec’s economy, the QFREB believes it is essential that the Quebec government implements measures that will improve access to homeownership,” says Patrick Juanéda, president of the QFREB Board of Directors. “They would also allow Quebecers to catch up in their homeownership rate, as they have historically lagged behind the rest of Canada (61 per cent in Quebec versus 72 per cent in the rest of Canada).”
The QFREB says the creation of a tax credit for the purchase of a first home would be like the tax measure implemented by the federal government as part of Canada’s Economic Action Plan of 2009. This credit would address the costs associated with the purchase of a home such as notary fees, sales taxes, mortgage insurance and transfer taxes.
The federation supports maintaining and improving the LogiRénov tax credit by extending it for two years and by lowering the minimum eligibility amount to $2,000. “Lowering the eligibility threshold would expand the types of work that could be performed in the areas already identified by the Finance Department,” says the federation. “Furthermore, extending this measure would provide better fiscal control of contractors, particularly in terms of countering tax evasion and under-the-table work.
The third proposal suggests adjusting transfer taxes “in order to reflect the significant increase in property prices that have taken place since transfer taxes were introduced in 1992, given that the average property price has more than doubled during this period,” says the federation. “The levels of transfer taxes should reflect this price growth in a similar proportion. In addition, exemption from the payment of transfer taxes, currently limited to vertical family relationships (parent, child), should be adjusted to include spouses, especially in cases of separation or divorce.”
Finally, the QFREB wants the Quebec Finance Department to work with the federal government to update the HBP and make major changes. “This program should allow taxpayers to use the HBP once again during a period of considerable change in their lives. In particular, the QFREB wants the HBP to be expanded to second homes and income properties,” says the federation.
“The QFREB believes that these measures are necessary given the fact that Quebec consumers have been faced with somewhat tighter mortgage rules by the federal government in recent years.”