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What Qualifies as Flipping Real Estate for the Canada Revenue Agency?

In October 2016 the Canada Revenue Agency (CRA) introduced new changes to its real estate sector reporting requirements. The biggest change was the CRA’s addressing of those who were non-compliant in the real estate sector, focusing on those who don’t correctly report their goods and services, unreported capital gains, unreported income, and most importantly for real estate investors – property flipping.

Here’s what you need to know to stay in the CRA’s good graces in the wake of these added guidelines.


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The New Ontario Foreign Buyer’s Tax: What You Need to Know

The Ontario government recently introduced the Fair Housing Plan, which includes sweeping legislation for the real estate market – most of which will have an impact on landlords in Ontario. One of the measures was the Non-Resident Speculation Tax (NRST) of 15%, which is meant to curb speculation by foreign investors in southern Ontario.


The brass tax of the NRST


The NRST has been in force since April 21, 2017. It imposes a 15% tax on real estate purchases of any property that would be considered a single-family residence that is purchased by a foreign national, entity or corporation. The full text of the NRST is available here.


Refugees and immigrants are not subject to the NRST. Additionally, a rebate program is available for foreign nationals who obtain Canadian citizenship – they can receive a rebate of the tax if they become a citizen within four years. Students enrolled in a Canadian institution for at least two years are also exempt from the NRST. A foreign national student would only receive the rebate after two years of full-time attendance at a Canadian university or college.


The NRST’s geographic scope expands well beyond Toronto and the GTA. It includes the following municipalities:


  • Brant
  • Dufferin
  • Durham
  • Haldimand
  • Halton
  • Hamilton
  • Kawartha Lakes
  • Niagara
  • Northumberland
  • Peel
  • Peterborough
  • Simcoe
  • Toronto
  • Waterloo
  • Wellington
  • York


Vancouver foreign buyer’s tax sparks GTA’s NRST


After a foreign buyer’s tax of 15% was levied to cool housing prices in Vancouver, there was evidence that firms marketing Canadian real estate shifted their focus to Toronto. However, the Toronto Real Estate Board surveyed Toronto area Realtors and found that only around 5% of real estate transactions conducted in 2016 were from foreign buyers.


Around a quarter of those purchases were rental investments, with the rest being purchases of homes for the individual or a family member. The percentage of foreign buyers was much higher in Vancouver – it was just above 15% before the B.C. government introduced its foreign buyer’s tax in 2016. It subsequently dropped to about 4% as of December 2016 – only a percentage point below the TREB’s estimated percentage of foreign buyers in Toronto and the GTA.


The Ontario government first showed a distaste for introducing a similar tax in 2016, preferring to let market forces prevail. However, winds changed as the public became increasingly concerned with skyrocketing housing and rental costs in Toronto and the GTA and the Fair Housing Plan was introduced in April 2016 with the NRST as a prominent plank in the Plan.


Various Reactions to the NRST


The Toronto Real Estate Board didn’t have anything specific to say about the NRST in its statement reacting to the Fair Housing Plan, but did say that more empirical data is required before policy decisions are made. We didn’t really know the numbers of foreign nationals that were buying into the Toronto and GTA markets prior to the enactment of the Fair Housing Act; that data will be available to the government once the Plan has been in force for a few months.


Tim Hudak, CEO of the Ontario Real Estate Association, had this to say about the NRST. “The main culprit behind rapidly rising house prices is the GTA’s unbalanced market – housing supply cannot meet demand – not foreign buyers.”


TD Economist Beata Caranci argues in favour of the tax, stating that it has worked well in international jurisdictions such as Hong Kong, Singapore and Melbourne to cool housing markets but not to slow them down. However, she added in a joint statement with other TD economists that “Ultimately, it is unknown what degree of home sales are related to this speculative behavior.”


Will the NRST cool a hot housing market?


Tim Hudak’s argument for supply not meeting demand seems sound, but it remains to be seen how much of that demand was generated by foreign investors. Parsing it out further, how much of that demand is being generated by foreign investors speculating on the market? If 25% of homes purchased by foreign nationals in 2016 were rental property investments, that’s an income-generating venture which allows for more rental supply for tenants, not speculation.


Until the data comes in, we won’t have any numbers – and that is the TREB’s point. The B.C. government did it right by gathering data prior to enacting its legislation, and found that a high percentage of property purchases were coming from foreign buyers. The Ontario government has put the cart before the horse, and will no doubt reap the tax rewards of such a move, but it isn’t evidence-based policy decision making.


One thing is certain – the NRST is an effective tool to curb speculation for those who were looking to speculate in the Vancouver market and shifted gears to Toronto. However, the number of transactions which occurred because of that shift is unknown – we’ll know soon enough. In the meantime, bidding wars will continue in Toronto and the GTA, and the only change is that foreign buyers may not be parties to those wars.

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The Implications of Taxing Foreign Buyers in Ontario


Rising real estate costs have been an issue in many heavily populated areas of Canada. In an attempt to combat this, British Columbia now has a 15% tax on any real estate transactions made by non-Canadians. While it will take much more time before it becomes clear whether or not this was an effective measure, other provinces with quickly increasing real estate costs are looking to follow with similar taxation. The most significant province considering taxing foreign homebuyers is Ontario, but is that the best idea?

Who Does This Foreign Real Estate Buyers Tax Affect?

If Ontario were to implement anything similar to what British Columbia has (whether it be a 15% tax or a similar value) then there could be many adverse effects on immigration. Depending on the value of the home and the associated tax, many people moving to Ontario will be unable to afford homes and could opt to move to other areas of Canada or the U.S. instead. This could impact places like Toronto in many significant ways because of the large foreign population there and it being drastically reduced. Anyone selling their home may also be put at a disadvantage because of the reduced interest from people who make up a large portion of the current market.

Additionally, any foreign buyer considering the purchase of a vacation home in cottage country may be put off by such a tax.

Who Benefits From a Foreign Real Estate Buyers Tax?

Despite the negative impact to some, there will be certain parties that will profit from the change. Most significantly would be the provincial government as they would gain significant revenue from the new tax. Domestic home buyers would also benefit from being exempt from the taxation and having more options and opportunities to search for real estate. Their home buying would not be hindered, and more of the market will be dominated by Ontario natives.

Long Term Repercussions

It remains to be seen what sort of long-term changes come from taxing foreign home buyers. The likely outcome will be more real estate being domestically owned and most outside buyers moving elsewhere. The property costs in Ontario may go down like expected but other areas of the economy may suffer from the reduced population. Much more time is needed to truly see how the tax changes Vancouver and other British Columbia cities before too many other provinces follow suit and make similar laws, and even then what works in British Columbia may not be the best choice for other provinces. But only time will tell.

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How Taxes Work on Real Estate Inheritance in Ontario

Real Estate Inheritance Toronto

Passing down real estate in Ontario is relatively painless, if you are only transferring one property. However, if you are passing down multiple properties, you may want to talk to a financial planner and/or a tax accountant to get the best advice on what to do for your estate.

Taxation Implications for a Principal Residence

A principal residence is considered to be the dwelling that the deceased inhabited the most. In many estates, there will only be one residence to deal with on a final return. When a principal residence is passed on, it is deemed to be passed on at fair market value to the estate, which means that what it is worth at the time of the property holder’s passing is what it is worth in the eyes of the Canada Revenue Agency.

While there are no immediate tax implications, if the inheritor(s) choose to sell the property, they will owe capital gains tax on the amount they make on the property over and above its fair market value at its time of transfer to the estate. Don’t rush to sell though – if market value is climbing significantly, the profit you make from hanging on to it will fair outweigh any losses from capital gains tax. Consult a certified financial planner for the best strategy for your situation.

Capital Gains Tax Explained

A capital gain is the profit made from the sale of stocks, securities, real estate or other vehicles. In Canada, half of your capital gain is taxable at your usual marginal tax rate, which varies. For example, if you make a profit (or capital gain) of $50,000, half of it is taxable, which for a person with a 35% tax rate would net out to $8,750 in taxes. While it’s a hefty hit, you still get to keep a large portion of your initial profit.

Tax Hits on Secondary Properties are Larger

If an estate passes down a primary and a secondary property, the tax hit on the secondary property, typically a cottage or vacation home, is much larger. In that case, the capital gain is deemed to be whatever the profit is on the property between the time the deceased bought it and what it was worth on their date of death – which in the case of a cottage can be a very significant amount of money. An Adjusted Cost Base (ACB) is factored in which can help offset some of this – so the key is to really take advantage of all of the things that go into your ACB.

BDO has a very handy checklist of all of the things to keep track of to calculate the ACB of a cottage, and this can apply to any form of secondary property. Receipts of anything to do with renovations, land transfer taxes and fees associated with the original sale, building improvements such as new doors and windows, and much more can go into the ACB. Ongoing maintenance costs, such as regular landscaping, do not factor into the ACB.

The Canada Revenue Agency does frequently audit returns which include secondary properties as this is a lucrative source of tax income, and mistakes are often made in ACB calculation, such as original receipts not being retained.

If you are passing down a secondary property, consider storing receipts electronically as backup as well as original copies in a safe location, and share these with the executor of your estate. Update them as you add items which could qualify for your ACB.

If you are able to do advance planning, and your cottage is worth more than what you consider to be your primary residence, talk to your tax accountant about what you would need in order to designate the cottage as your primary residence. It may be easier in retirement to meet the residency requirements in order to make that happen. This could help to reduce the capital gains tax bill for your beneficiaries, but should be managed properly by a tax accountant in order to make your actions fit the requirements of the Canada Revenue Agency.

Image Credit: Robert Jack Will, Flickr




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Inheriting or Passing On Different Property Types in Ontario

If you are inheriting or passing down property in Ontario, the regulations and taxation surrounding it will be impacted depending on if it is a rental property, principal residence, vacation property or commercial property.


Primary Residence and Vacation Properties


If a property being passed down is the primary residence of the deceased, it is received at fair market value, and you are only subject to capital gains tax if you sell the property. Vacation properties are treated the same for tax purposes.


If you are making up a will, make sure your spouse is listed on the title of the property as a joint tenant – particularly if you are not married and are common-law. If you are planning on leaving the property to children, ask the children first if they would be interested in inheriting and using the property, or if they would just sell it after your death. If they will be selling it and they already own property, they would have to pay capital gains tax on the proceeds from the sale.


Talk to a financial planner if the property is a high-value one; there are strategies you can use such as trusts to help offset those capital gains taxes, but most have upfront costs to set up so the savings in capital gains tax would have to be high enough to justify them. You can also gift the property during your lifetime, but this is a risk as you may not be able to recover money from the property if you need it.


Leaving a property to multiple adult children can make for a difficult situation – when a standard will is drawn up for this, each child becomes a “tenant in common” on the house, and each has an equal share of it. This means that if Dave, Judy and John all inherit their parent’s house, they are all equally responsible for it.


If Judy doesn’t want to sell it, but Dave and John do, Dave and John can’t sell the house unless they buy out Judy’s one-third share – if she’ll let them. It’s much better to make arrangements in advance; if Judy wants to live in the house, for example, you can make arrangements to leave Judy the house, and make up the difference to Dave and John by leaving them more liquid assets that they can sell or cash equivalent to what their share of the house would have been at fair market value.


For more information on what to do if you’ve inherited a primary residence, see this blog post.


Rental Properties


It’s almost more important to have a plan for a rental property as it is for your primary residence, since you need to take your tenants into account. Have a frank conversation with your spouse about if they want to manage the property or not if you die, and consider a property management company if you don’t. If you are leaving the property to kids who want to sell it, they should be aware of all of the regulations surrounding evictions for purposes of sale – Ontario law states that you must give the tenant 120 days notice if they don’t have a lease. If they have a lease, they must wait until the lease period is over for the tenant to leave. The Toronto Realty Blog offers an excellent cautionary note for those who want to sell a property before the tenant has vacated – if you don’t have time to read it, it’s just not a good idea.
Commercial property


Any commercial property should be wrapped up as a part of a business succession plan, which you should have in place if you own commercial property. This is definitely an area that you require a lawyer for to ensure that it is done correctly. Any commercial properties should be part of a business, and your inheritors will be bequeathed a portion of the business after partners, creditors and others are paid out first.


Foreign property


If you own property in the US, but are not a dual citizen, you should set up a US trust to handle the property, particularly if it is a higher-value one. This way your heirs won’t have to pay Canadian taxes on the property, only the trust will owe US taxes if it is sold. Consult with a real estate and/or tax lawyer to set this up.


If you need a company to handle rentals or listing a property, we’ve been doing it as a family business in Toronto and surrounding areas for a number of years. Contact us for more information.


Image Credit: Robert Jack Will, Flickr

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Ontario Real Estate and Probate in Wills

Ontario real estate and probateBeing an estate executor is usually a thankless job – and it’s definitely a job. If you have taken on the mantle of executor for a family member, there are a few things you should know about dealing with real estate.

New rules went into effect in 2015


If you’re trying to manage being an executor on your own, you may be getting advice from all sides – some of it based on old rules. Registering for probate in Ontario got a little more difficult in 2015, but the new rules do bring some good news for estates with real estate outside Ontario – any real estate listed outside Ontario does not need to be listed, meaning you are only paying Ontario probate fees on Ontario property.


The bad news is that you used to be able to put in the total value of the estate to register for probate – now you need to list assets separately. Specifically for real estate, you need to list the value of each real estate holding less encumbrances (e.g. liens) and any vehicles on that property such as ATVs or boats. These are two different categories, so the assets need to be listed separately. You can’t roll the cost of the boat into the value of the real estate, for example.


Joint assets and right of survivorship

Those planning wills and estates involving real estate – or any other asset – should pay attention to what is known as the “right of survivorship.” This is very important as it could exclude any jointly owned assets from needing to be registered for probate in Ontario. It means that the surviving owner automatically absorbs the deceased owner’s share of the property or asset.


While this usually happens automatically with spouses who both have their names on the title, it can’t hurt to check with a lawyer to see how to make sure all bases are covered with other assets. Common-law spouses will definitely want to ensure that a right of survivorship exists on jointly held property and assets, and there are some situations where it may make sense for married couples – if only to keep bases covered.


Any joint assets held with a right of survivorship do not have to be registered for probate, while those without the right of survivorship do. If you are the executor, it is up to you to determine if a right of survivorship exists – if you leave off assets, you could be undervaluing the estate.

Always make a will – always

If you die “intestate”, or without a will, the courts decide who the beneficiaries are of your estate. If your spouse has their own bank account, it will be held in probate. The simple solution to this is to state that all solely held property is to be left to the surviving spouse, or to make all of your holdings joint ones. Don’t use “will kits” to make up your will, take the time and spend the money to have it properly done with a lawyer. A will generally takes about half a day to complete and costs around $500, unless you are dealing with more complex assets than the average case, such as commercial real estate or multiple properties. If you have the money to invest in such ventures, you have the means to protect them for your loved ones.

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I’ve Inherited Property in Ontario – Now What?

keys-1317391_640If you’ve inherited property in Ontario, there are many potential implications to consider for your taxes and your finances, especially if it was a surprise inheritance and you haven’t had time to properly plan for it. We’ll walk you through some of the steps you need to take.


Step 1 – Get a professional team together


You probably have enough to deal with considering that you have inherited property from someone close to you passing on. Even if you are a tax professional, lawyer, or financial professional, you may need some guidance during this time. If you are dealing with a straightforward situation, such as inheriting your parent’s sole residence, you will likely just need a tax accountant. If there are multiple or commercial properties involved, you may want to add a financial planner and/or lawyer to your team.


While searching for professionals, make sure they have proper accreditation. For accountants, this means a Chartered Professional Accountant (CPA). If you are looking for a financial advisor, look for a Certified Financial Planner (CFP). These designations mean that the professional who holds them has undergone an intensive certification process, and it also means they need to participate in continuous professional development to maintain their certifications.


Ongoing professional development ensures they are always on top of the latest developments in the ever-changing landscape of regulations. Their actions are also regulated and enforced by their respective professional associations, so they will potentially lose their designations if they engage in shady business practices. Simply put, they are more trustworthy and have more training than someone without a professional designation.


Step 2 – Determine if you are going to keep or sell the property


Deciding whether to keep or sell the property can be a tough call. If you are inheriting a treasured family home or cottage, it can be tempting to keep it. This is typically the easiest way to handle an inherited property, particularly if you are the sole inheritor of a parent’s primary residence, and may make sense from a market perspective – real estate prices are on a perpetual upswing. Holding onto a property in the current market to wait for its value to appreciate makes more long-term sense than selling it.


However, if you are not the only inheritor and there are siblings to consider, it may make more sense to sell. Trying to manage a property between a number of siblings can be a difficult venture, and only works if everyone is willing to put in equal money and time to manage it. This isn’t always going to be the case.


Keep in mind that if you sell the property, and you already own a primary residence, you will be subject to capital gains tax for the difference between the fair market value from the time you inherited it and what you end up selling the property for. For example, if you inherit a property valued at $500,000 at the time of inheritance, you have to pay capital gains tax when you sell the home for the $500,000 plus whatever you make on the property sale, even if your parents only paid $200,000 for it initially.


This is where a tax accountant and possibly a financial planner will come in handy – they will help you determine if you should keep or sell the property. If you don’t already own a primary residence, the process will be much easier as you will not be subject to capital gains – however you still need to report the sale of the property on your tax return.


If you have inherited a cottage, and already have a primary residence that you own, you’ll want to talk to a tax accountant about which residence you want to designate as your primary residence for tax purposes. If the cottage is worth more than your house or condominium, this may be a viable option. Generally, three months of residency is all that is required. Talk to your tax accountant to see if this is worth doing.


Step 3 – I’m keeping it and renting it out. Now what?


If you’ve decided that you want to hold on to the property but don’t want to use it as your principal residence, you may want to make some rental income while you are waiting for it to appreciate, particularly if there is still a mortgage on the property.


Consider this seriously before you become a landlord – being a landlord is a part-time job that may require you to take unexpected time away from your full-time job and family to deal with tenant issues. Talk to friends and family who rent out property – at least one of them will have a horror story about dealing with non-paying tenants and other issues. It isn’t something to be entered into lightly.


This is where hiring a property management company makes sense. A property management company will handle all of the pain points for you, without you having to do much of anything. We will vet tenants for you, take care of contracts, and maintain the property if required. We make the process as painless as possible, and it costs a lot less than getting the wrong tenants in who can do damage to the property, not pay rent, and more. Contact us to find out how our property management services work if your property is in the Greater Toronto area.

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Common Tax Mistakes to Avoid When You Want the Kids to Inherit the House

We all care for our kids, and many parents intend their children to inherit their homes, so that the wealth stays in the family.

This is a natural desire, and very commendable. It seems so natural, in fact, that most people can’t even imagine the tax and inheritance traps that lay in wait for this simple move, leaving your children with much less than you had anticipated or intended. Others anticipate the traps, and try to avoid them, making additional mistakes in the attempt. Unknowingly, of course, but the damage is done.

The results of such mistakes range from inheritance conflicts to additional income taxes (often referred to as inheritance capital gains taxes in Canada), and generally causing your family unintended losses and unnecessary additional grief.

Let’s talk about two different types of property and how to best secure them for your children.

Your Home or Primary Residence

Sometimes parents will transfer a fifty percent or bigger portion of their house to their child’s name, to avoid inheritance disputes and reduce probate fees. This type of transfer of your home to your kids will often result in them being taxed 50% on any added value of their transferred share, due to it being legally, a sale. They may also have to pay additional taxes and fees on it, unless they use it as their primary residence, which is a relatively rare occurrence.

In view of this, it is better for parents to remain the sole proprietors of the property until they pass on. If the property does not then become the child’s primary household, it will end up incurring a capital gain on investment tax, but there is nothing to be gained (and a lot to be lost) by trying to make a partial transfer in advance by making a “ghost sale”.

Transferring a cottage may be a good idea to do in advance, because it is a different category of dwelling. To be sure how to act in your specific circumstances, we advise to consult a specialist.

Bank Accounts

It is not uncommon for elderly people to change their bank account status to a joint account with one of their kids. This is meant to save them from incurring probate fees. Most make the common mistake of continuing to report their income from that bank account on their tax return. This essentially means that the joint tenacity is a formality, and the child is not really the co-owner of the account. As far as the CRA is concerned, this is not true joint tenacity, which means the probate fees will not in fact be reduced.

An additional problem of such a strategy is that, in a family of many siblings, once you put one child’s name on the bank account, he or she might decide they will be the account’s owner henceforth, leading to litigation of the estate and conflict between siblings.

If you are not sure what to do in your specific scenario, the best thing is to consult with specialists.

We have a great deal of experience dealing with inheritance law, capital gains on inheritance tax issues and other related topics. Call us now and we will be glad to help you make sure your family’s wealth stays within the family.

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Property Inheritance in Ontario 101

Writing a will is a very personal subject and often involves a lot of considerations about property and heirs. The process can be made even more difficult because of legal issues, taxes, and various hidden aspects of how the law handles property inheritance in Ontario. This leaves several factors that need to be considered when making your will and bequeathing property.

Leaving Behind Property

Passing property onto your children after death is a very common practice, but it becomes much more complicated when you have more than one child. Many parents opt to place the property in the hands of multiple owners by designating all of their children as heirs to the property because they believe this will avoid disputes and simplify the decision making process.

However, this method creates its own problems. There can be dissent between siblings over what to do with the property and who has final say. To simplify the process, it is recommended that everyone communicate on the subject and determine a single heir who could handle the property and handle the associated taxes and affairs appropriately. If you don’t think this would solve potential issues, setting up a family trust gives all siblings more legal protection than the sole heir route, while offering some tax benefits.

It is always recommended that you seek legal counsel when making these decisions and to avoid missing any other hidden aspects of the will.

Transferring Property While Alive Can Have Tax Implications

Transferring property into either joint ownership or a family member’s name is a method frequently used by those who want to avoid probate tax, or the estate administration tax in Ontario. These fees are actually not as high as people imagine – for example, a $1 Million estate would owe $14,500 in probate tax. The tax implications of transferring property could net out to more money than that – it’s best to consult with an accountant and/or a real estate lawyer to determine the best strategy for high-value estates with property.

Drafting a Proper Will

Having a will is always a good idea. It is impossible to know when you may need it. Though it is also recommended that you make a will and make edits to it whenever you go through a significant life change such as marriage, divorce, having children, starting a new business, acquire new assets, or a beneficiary passes away.

All of these life events could change who your beneficiaries are or what assets you will have to pass along, so it is important to make edits to ensure accuracy and that nothing is left unattended.

The will itself needs to fit certain guidelines to be legal. While a handwritten statement of intention can be lawful, there can be complications when dealing with property or other high value assets. In Ontario, a will can be challenged if a spouse and/or dependants are not adequately provided for in it according to the Ontario Attorney General. Anyone looking at leaving property to multiple heirs, or heirs that are not spouses or dependents, should consult a lawyer to draft up a proper will to ensure everything is as legal and binding as possible, so that challenges to the will have less of a chance in court.

If you die without a will, or “intestate”, the estate distribution is governed under Ontario’s Succession Law Reform Act.


This is Part 1 in a six-part series of blogs we’ll be doing on real estate inheritance in Ontario. Stay tuned to our blog for weekly updates, or sign up for our newsletter.

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Toronto Real Estate Market Watch — November 2015

In an announcement made by Toronto Real Estate Board President Mark McLean last week, GTA REALTORS® reported 7,385 home sales through TREB’s MLS® System in November 2015 – a 14 per cent increase compared to November 2014 and a record number for November sales to date.

Toronto’s real estate market saw 96,401 sales for the first eleven months of this year. There is no doubt that 2015 will go down in history as a year Toronto real estate made the record books. High housing prices, the number of homes sold, and benchmark indexes as well as a low number of active listings, average days on market and the amount of square footage you get for a dollar–not to mention the value of the Canadian Dollar itself. However, as the year winds down, people are turning their focus away from the red-hot real estate market and putting themselves in gear for the holiday season.

record highs for GTA housing market

Credit: Toronto Real Estate Board

December is often an interesting month in for the Toronto real estate market–sometimes, buyers bid to get into the market right before the new year while other years they wait for the fresh listings that often arrive in January. Mr. McLean remains optimistic for December, as well as the upcoming year. With one more month to go until 2016, we’ve still managed to set a record in for home sales in the TREB market area for an entire calendar year (the previous record set in 2007 and reflected all 12 calendar months).

McLean believes the widespread demand for homeownership is a priority for families in the GTA and attributes it to real estate being the best long-term investment. Despite rumours of a housing crash, Toronto continues to prosper and doesn’t seem to show signs of stopping. The other question remains–if there is no crash, will there be a correction? Will the market get out of control?

The federal Department of Finance wants to step in and increase the minimum down payment for a home from 5 per cent to 10 per cent. With stiffer borrowing rules, the market has a better chance of cooling without a drastic crash. An increase will also alleviate the taxpayers exposure to insured default losses and possibly boost sales in the condo market. First time home buyers who are only prepared to put a 5 per cent down payment must either wait until they have twice the amount of money they initially had or settle for a condo. While all these pros sound fantastic for markets like Toronto and Vancouver, other markets in the Country, especially cities that have already experienced losses in the housing market, will suffer. When will these proposed changed come into effect? We can expect the Federal Department of Finance to present the motion for additional 5 per cent on down payments to the Minister of Finance as early as January 2016.

With what seems to be a very small window to decide whether to toss the whole idea of buying a home, borrowers looking to put a smaller down payment on a home should seek the advice of a mortgage professional and reassess their budgets realistically. Increase or not, the New Year is the perfect time for families to analyze their finances to ensure sound decisions in the future.

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HighGate Property Investments Inc: Your Source for Professional GTA Real Estate Services