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2018-2019 Provincial Budget: The GMREB Welcomes the Measures Related to Real Estate and Housing

The Greater Montréal Real Estate Board (GMREB) has examined the provincial budget tabled yesterday by Finance Minister Carlos Leitão, and is pleased with all of the government’s measures related to real estate and housing.

The GMREB particularly welcomes the measures that promote homeownership and encourage debt reduction for first-time buyers. The introduction of a non-refundable tax credit for the purchase of a first home is one of these measures.

Thus, starting in 2018, eligible first-time buyers will be able to take advantage of a tax deduction of $5,000 to help defray the costs of incidental expenses not covered by a mortgage, such as inspection fees, property transfer taxes, notary fees and moving expenses. Combined with the federal tax credit, the Québec tax credit could allow eligible Québec buyers to obtain up to $1,376 in tax relief following the purchase of their first home ($750 through the Québec tax credit, $626 through the federal tax credit).

The GMREB is also pleased with the extension of the RénoVert refundable tax credit, a program that provides assistance equal to 20% of eligible residential renovation expenses that exceed $2,500.

The March 2018 Québec Economic Plan also provides for an investment of $103.9 million reserved for the City of Montréal for the construction of affordable housing units, residential adaptations for persons with disabilities and housing renovations in rundown residential areas. This amount represents 37% of the total investment in those three programs.

The GMREB welcomes the reduction in the tax rate for Québec’s SMEs, a measure that may affect several real estate brokers and agencies. The March 2018 Québec Economic Plan provides for a gradual reduction over three years from 8% to 4% in the tax rate of SMEs in the service and construction sectors, as of today. The rate will be reduced by 1 percentage point per year to 4% as of January 1, 2021. The GMREB recommends that brokers and agencies verify the tax impact that this measure may have on their organization with their financial adviser.

However, while these measures do represent additional financial assistance and are well received, the GMREB believes that they will have only a modest impact on improving homeownership.

Finally, although the federal government, as well as provincial and local governments in some Canadian cities have introduced measures to balance the real estate market, including to limit the impact of real estate investments by Canadian non-resident buyers, the analysis carried out by Québec’s Department of Finance concludes that the real estate market in Québec is balanced. The vast majority of real estate transactions are concluded by residents of the province and the presence of foreign buyers remains limited. The moderate increase in housing prices reflects the good economic situation of Québec households.

For detailed information about the Québec budget, click here.