The province of Quebec is the latest jurisdiction in Canada to produce a budget. It was delivered last week, and while other governments are fretting hot markets and housing bubbles, Quebec is being chided for not doing enough to make home ownership easier.
The Quebec Federation of Real Estate Boards has expressed an overall satisfaction with the provincial budget, but is critical of the government for not eliminating the land transfer tax for first-time buyers – the so-called “welcome tax”. The tax is graduated starting at 0.5% on the first $50,000, and climbing as high as 2.5% on the value of a purchase above $1 million, depending on the jurisdiction. The rates have been in place since 1992.
The Quebec market, which has a long history of renting, is showing signs of a shift toward ownership. The ownership rate in Quebec is currently 61%, compared to 70% in the rest of the country. The QFREB feels the tightening of federal mortgage rules is putting a heavier burden on young, first-time buyers. The Federation would like to see the Quebec government take steps to address affordability by reducing taxes for first-timers the way Ontario did in its last budget.
The new Ontario budget is expected within the next few weeks. The government is promising measures to cool the hyper-heated housing market in the Greater Toronto and Hamilton area.