Navigating Tax and Market Trends in 2025 As a GTA or Toronto Landlord
Being a landlord – or even a homeowner – in 2025 is daunting. We’re all concerned about the economy, elections, market forces, and how all of this will affect our business. Luckily, there are still a few perks left that we can take advantage of.
Capital Gains Tax Delayed to January 1, 2026
If you were thinking of unloading your rental property, you won’t have to worry about the proposed federal capital gains tax until 2026. This gives condo owners, especially, a breath of relief. There’s also the very good chance that the tax won’t survive a federal election.
Relief for More Seniors for Toronto Property Tax Hike
While this won’t apply to most property investors, it may to a few seniors. Toronto has raised the income to $60,000 to qualify for property tax relief if you are also a senior or have a disability, raising the number of qualified homeowners by 3,000. The property tax hike will likely go into effect in the next few months, and goes to council in February.
Federal Support for Secondary Suite Builds
This perk allows for refinancing of mortgages to build secondary suites in homes. This would allow homeowners with a single-family property to revamp it with a basement suite to generate additional income. As with the capital gains tax, this is up in the air with a potential federal election, but has not yet been targeted by opposition parties.
On the flip side, if you want to carry out a major renovation like this, new renoviction bylaws have come into force in Toronto that make it extremely difficult to evict a tenant if you want to perform extensive renovations. The bylaw is designed to make you wait until the current tenant leaves to undertake renovations. For now, these bylaws only exist in the City of Toronto and the City of Hamilton.
Interest Rates Should Remain As They Are or Drop
If you are thinking of buying a rental property, economists are predicting that interest rates will be cut by the Bank of Canada even lower by the end of the year – TD predicts that they will fall to 2%. This paired with the prediction that prices will either stay the same or decrease slightly on properties such as condos make 2025 an ideal time to get that new property. It’s up to you if you want to “play chicken” with the rates and wait until later in the year to do so.
Being a Landlord is a Tariff-Proof Investment
Tariffs from other countries shouldn’t affect income for a landlord. While prices may rise across the board and jobs may be lost, people will always need housing. The only thing that tariffs may contribute to is job losses with accompanying higher incidences of unpaid rent, so consider during tenant screening if the potential tenant has a job that may be axed in 2025. You will also want to maintain good relationships with current tenants so that they come to you if there is a job loss or reduction to negotiate, rather than just not paying rent.
If you want additional guidance for being a landlord in 2025, come to us. As Realtors, we can help you buy and sell investment properties. As property managers, we can help you navigate tenant screening and maintain those good relationships with your tenants. Contact us today!
