It is a well-known fact that housing is a major driver of the economy. Homeownership provides the opportunity to grow wealth through real estate investments. Similarly, the housing sector provides employment opportunities in various sectors. With the chaos and challenges presented to the economy by COVID-19, it has become even more apparent that housing is a crucial component of the provincial economy.
A recent Nanos study commissioned by the Ontario Real Estate Association found that Ontarians believe that housing is an important (60 per cent ) or somewhat important (32 per cent) contributor to the provincial economy. The survey shared views on actions Ontarians feel would help make homeownership more affordable, in turn jump starting this valuable economic engine.
Other highlights of this survey include:
- 63 per cent of respondents strongly agree that a tax credit that helps seniors age in place would be helpful.
- Similarly, a strong majority of respondents would welcome tax credits that assist with green housing.
- A strong majority of respondents feel that increasing the tax rebate for first time homebuyers would be beneficial.
- A majority of respondents feel that the government should speed up development of housing around major transit stations and corridors, and accelerate development of surplus land to help create more housing stock.
Taking into account the sentiment of what Ontarians would find most useful as homeowners, OREA released a comprehensive report called Rebuilding Ontario: A Framework for Recovery to the Provincial Government, with guidance on policy that can help stimulate the economy via the housing sector, with a number of actionable recommendations.
Quoting from this press release that accompanied the release of the framework, OREA CEO Tim Hudak said:
“The aftermath of the COVID-19 pandemic reminds us how important the housing sector is to Ontario’s economic health… The key instrument for economic recovery in Ontario is the sale of homes, which will result in an injection of more homes on the market and create spin-off jobs and consumer spending. The best way to do that is with policies that are focused on growth– including a Land Transfer Tax holiday, which would make Ontario homes more affordable by temporarily eliminating a punishing tax, bring more homes into market, and help address our province’s supply shortage. “
The Land Transfer Tax holiday is one of the more popular policy proposals in the framework. It would see the Province grant a time limited holiday on the LTT, with the goal of stimulating purchases, which would boost the economy. OREA proposes that this LTT holiday would be in place for six months, and only be applicable to tax on a certain percentage on the sale of a home (i.e. on the first $600,000). They hope that this tax break would produce new listings and encourage people that might otherwise not have been buying, to jump in the market.
There were also a number of recommendations around rebates and tax credits for home renovations, with policy to support seniors aging in place at the top of the priority list. OREA recommends a refundable tax credit that would only be eligible for mobility or accessibility renovations for those 65
years of age and over. Ideally, they would like to see additional tax rebates for other types of home renovations as well, including making green changes to homes.
Some of the other recommendations centered on housing supply, including making changes to streamline approval times at the municipal level for development, remediating brownfield sites and creating clarity around zoning issues that might impede or delay development.
They also recommend creating a framework to regulate short-term rentals like AirBnb, which is important particularly for the city of Toronto, where COVID-19 has impacted this segment of the market heavily, especially for condo owners and landlords.
As homeownership continues to be highly valued among Canadians, incorporating these recommendations will set the stage to create a really robust economy in Ontario, all while supporting the dream of homeownership.