federal – Refined Real Estate Team

Will Budget 2025 actually help housing affordability in Toronto and the GTA?

Jeffrey Luciano — Fri, 07 Nov 2025 23:04:54 +0000

On November 4, 2025, the Liberal government tabled Budget 2025 in the House of Commons, its first budget for the Carney government. Branded as a “Build, Protect, and Empower” plan, it touches on many aspects related to Canadian sovereignty and also centers heavily on housing, infrastructure, and affordability. There are major commitments to Build Canada Homes, housing-enabling infrastructure, and targeted tax changes for new homebuyers as well as the rental supply.

The budget must still be debated and voted on in Parliament, and some measures will require enabling legislation and provincial or municipal agreements before they fully come into effect. It is very likely that some horse trading will take place and change certain aspects, but let’s review what’s in the budget and whether it is likely to help with housing affordability in Toronto and the GTA!

Give me the quick answer.

If you’re just looking for the short answer, the budget does help in some targeted ways, but (not surprisingly) it does not actually “fix” affordability for buyers and renters in Toronto and the surrounding region. We don’t know that any budget actually could do that, so the real question is how much does it actually help?

Budget 2025 is presented as a housing and infrastructure budget at a time when projects are stalling, carrying costs are high, and many GTA households have moved from “stressed” to “priced out.” It introduces a new federal housing agency, confirms tax relief for certain first-time buyers of new homes, commits significant funding for housing-enabling infrastructure, expands federal backing for housing finance, and removes the Underused Housing Tax. The Toronto Regional Real Estate Board (TRREB) has recognized these as steps in the right direction, while making it clear they are not enough on their own to restore a realistic path to homeownership in the GTA.

Let’s get into the nitty gritty now for each aspect, where we’ll tell you if we think it’s going to be good or bad for housing affordability in Toronto and the GTA. We’ll also bring up TRREB’s position on each topic for some additional context.

Build Canada Homes (BCH)

The budget creates Build Canada Homes, a new federal builder and financing body focused on affordable, non-market and mixed-income housing, using federal lands and more efficient construction methods, and partnering with other levels of government, non-profits and private developers. In Toronto and the GTA, this is expected to focus on transit-served and higher-demand areas where public lands and higher density make sense.

Good or Bad? This is good for long-term structural supply, especially for renters and lower-income households who are currently squeezed out of stable options in the GTA. If BCH delivers real projects quickly on real sites in and around Toronto, it can reduce pressure higher up the ladder. It is not automatically transformative, because success depends on municipal zoning, approvals and fees aligning with it. It would be more effective if BCH included some portion of the $13 Billion (over five years) funding for market-based housing, especially townhomes, duplexes, and family-sized apartments. At the recent CREA Political Advocacy Day in Ottawa, this is exactly what was requested in over a hundred meetings with current MPs.

GST Exemption for First-Time Buyers of New Homes

Budget 2025 confirms a GST exemption for first-time buyers of qualifying new homes up to a defined price threshold, with tapered relief above that level. The goal is to reduce upfront costs and make new construction more attainable for end users rather than investors.

Good or Bad? This is good for a specific portion of the GTA market, namely first-time buyers purchasing new condos or townhomes in parts of the 905 or in certain transit-oriented developments where prices fall within the eligible range. It does much less for many buyers in the City of Toronto and in higher-priced GTA communities where family-sized or centrally located homes already sit above the cap of $1M. Yes, there is a reduced HST rate for first-time buyers on new homes between $1,000,000 and $1,500,000, but the full exemption is only available if your purchase price is under $1 Million. TRREB has supported tax relief on new homes, but argued that limiting it to first-time buyers restricts its impact in markets like the GTA. As set up, it is a useful targeted benefit, but too narrow to materially shift overall affordability in Toronto.

Elimination of the Underused Housing Tax (UHT)

The budget eliminates the federal Underused Housing Tax starting with the 2025 calendar year, removing a complicated and often confusing measure that forced many owners, corporations and trusts into filings that did not clearly relate to true vacancy.

Good or Bad? This is good from an administrative and policy standpoint. In a dense, condo-heavy city like Toronto, it reduces red tape and the risk of accidental non-compliance for ordinary owners and legitimate investors. It does not significantly change affordability, because local taxes such as the Toronto Vacant Home Tax continue to operate. TRREB and others had criticized UHT as poorly targeted; its removal is a sensible correction, but it won’t have an effect on pricing and supply.

Housing-Enabling Infrastructure Funding

Budget 2025 commits a large national funding envelope over the coming decade for infrastructure that directly supports housing, including transit, water, wastewater, roads and community facilities, with a clear expectation that these investments be linked to housing outcomes. For Toronto and the GTA, where infrastructure capacity often constrains intensification, this is highly relevant.

Good or Bad? This is very good if the Ontario government and GTA municipalities deliberately connect this funding to higher density and faster approvals around subway, GO and LRT lines, as well as key growth centres. When used that way, it can reduce per-unit costs, unlock new sites and improve feasibility for both rental and ownership projects. If the money is allocated without strong ties to housing delivery, the effect on affordability will be weak. TRREB’s support for “housing enabling infrastructure” reflects this approach; whether this becomes a real win for the GTA depends on how firmly that principle is enforced.

Expanded CMHC Guarantees and Support for Multi-Unit and Rental Housing

The budget expands federal capacity to backstop housing-related lending, including more flexibility and room for CMHC guarantees and insured loans that support new housing supply, with a particular emphasis on purpose-built rental and multi-unit projects. For developers and institutional investors active in Toronto and the GTA, this can improve access to longer-term, lower-cost capital.

Good or Bad? This is good for getting more rental and multi-unit housing built or preserved in a challenging cost environment. In the GTA, where financing conditions can be the difference between a project proceeding or being cancelled, stronger federal backing helps. However, as TRREB and industry stakeholders continually point out, cheaper or better-structured financing does not overcome high development charges, community benefits, land costs and lengthy approvals in Toronto. These measures are supportive and necessary, but they work only if local cost and regulatory barriers are also addressed. They help increase potential supply, but they do not, by themselves, make homes affordable for the average buyer. Again, the focus is on supportive housing rather than market-based housing – and while supportive housing is crucial for our society, it makes up only 4% of the total housing stock in Canada.

Stronger Anti–Money Laundering Rules for Mortgage Intermediaries

The budget tightens anti–money laundering and anti–terrorist financing rules for mortgage brokers, private lenders and administrators. The aim is to improve transparency and reduce the role of opaque or high-risk capital in the housing system.

Good or Bad? In theory, this is good. For a global market like Toronto, stronger AML rules support integrity and public confidence. They help ensure that prices are shaped by real demand rather than distorted by questionable funds, particularly in more speculative or luxury segments. For ordinary buyers, end-user sellers and legitimate investors, however, the impact is largely procedural. It means more paperwork for lenders, so we may see a bit of a slow down in the overall processing of deals, which could cause some frustration.

How does all of this impact you if you’re thinking about buying in 2026?

If you are a first-time buyer looking at new construction within the qualifying price range, Budget 2025 can put meaningful money back in your pocket and make certain projects more viable options. It may nudge some developers to tailor product to stay within those thresholds, particularly in emerging transit-oriented communities around the GTA. If you are shopping for resale or for homes above the cap, the budget does not directly lower your costs. Your affordability will continue to be driven mainly by interest rates, local inventory and your own income and debt situation, not by these federal measures. The bigger supply benefits from Build Canada Homes and infrastructure funding will take time to show up and will not materially change 2025–26 pricing pressures in core Toronto.

What about if you want to sell in 2026?

Similar to what it does on the buy side, if you own in Toronto or the GTA and are considering selling, this budget does not introduce any new broad-based measures that directly target you. The elimination of the Underused Housing Tax simplifies things if your ownership structure is more complex, and a better-aligned infrastructure and supply push may, over time, support confidence and activity in the market rather than suppress it. In 2026 however, your experience will still depend more on the skillset of your realtor, local demand, listing competition and interest rate trends.

While most of the housing focused measures in Budget 2025 are what we’d consider good for housing affordability, it might be more accurate to say they aren’t bad for it. While there are broader elements that could eventually help with housing affordability, it lacks any strong, immediate measures that will directly impact the cost of homes in Toronto and the GTA.

Nothing in the budget, by itself, fixes the fundamental affordability problem faced by typical households in Toronto and the GTA. Prices and rents remain high relative to incomes, and the biggest structural issues—local costs, approvals, and the pace and mix of new supply—are only partly addressed. TRREB’s response reflects that reality: progress, yes; solution, not yet.

Here’s our final word on the topic. If you are trying to decide whether to buy, sell or invest in 2026, you should not wait for a “perfect” policy moment from any level of government – whether Federal, Provincial or Municipal. You should base your decision on your timeline, your finances and the specific opportunities in front of you.

We regularly work with our clients to decide what makes sense for them, considering what’s going to happen in the market as well as their specific situation. If that sounds like something that you need, then don’t hesitate to get in touch with us.

Will Budget 2024 actually help housing affordability?

Jeffrey Luciano — Fri, 19 Apr 2024 17:49:16 +0000

Over the last few years it has become very clear that the run up in real estate prices in Canada – and in major urban centres like Vancouver and Toronto in particular – has caused a housing affordability crisis. While homeowners have benefited from the tremendous increase in average house price, renters and the next generation of potential homeowners have found it very difficult to afford a home that suits their needs.

Housing affordability has become one of the biggest topics in Canada and as such, it is no surprise that the latest Federal budget, Budget 2024, Fairness for Every Generation, contains a number of measures focused on real estate affordability.

Let’s look at Budget 2024 from a real estate perspective to see what’s included, what seems like a good idea, and what may miss the mark entirely.

On one hand…

The government has described Budget 2024 as a budget that “takes bold action to build more homes…and will grow the economy in a way that’s shared by all.” Those are welcome words and given we’ve seen a number of housing announcements in recent weeks, including Canada’s Housing Plan, which was released on Friday, April 12, 2024, it’s clear that the federal government knows housing affordability is a real issue.

Budget 2024 details an ambitious set of housing initiatives aimed at tackling the housing crisis through increasing housing supply, helping homebuyers and renters, and supporting innovative solutions for builders. That means we’re gonna fix this, right? Hold on a moment.

…but on the other hand.

While the new initiatives focused on increasing housing supply are absolutely welcome, they come hand in hand with a number of new tax measures that could negatively affect housing supply and affordability.

Housing is a complex issue, so it’s not particularly surprising that some aspects of the budget designed to help other parts of the economy have ripple effects on housing affordability, but it is disappointing to see that the Federal government is diminishing the impact of new initiatives with new tax measures.

Is it one step forward and one step back, or does Budget 2024 actually look like it will help with housing affordability overall? Let’s go through the bits of the budget that impact real estate along with our take on whether it’s a good thing or a bad thing.

Capital Gains Tax Inclusion Rate

The government is increasing the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds. Individuals will continue to pay tax on 50 per cent of any capital gains up to $250,000 per year. The new rules will apply to capital gains realized on or after June 25, 2024. Selling your principal residence will continue to be exempt from capital gains taxation.

Good or Bad? This is potentially bad news for housing affordability, as in some cases, the increased capital gains will make it more expensive to increase supply. For example, hiking the capital gains tax could increase the costs of converting underused commercial property into new housing.

Increase in Home Buyers’ Plan Limit

The Home Buyers’ Plan (HBP) limit will increase from $35,000 to $60,000 for an individual or $120,000 for a couple, allowing first-time homebuyers to withdraw more from their Registered Retirement Savings Plans (RRSPs) for down payments, benefiting from the tax advantages of RRSP contributions.

Canadians withdrawing from their HBP between January 1, 2022, and December 31, 2025, will benefit from an extended repayment grace period, now up to five years, allowing them to better manage mortgage payments.

Good or Bad? This is good news for housing affordability in the sense that it will make it easier for potential home purchasers to put down a larger downpayment and allow them more time to repay the withdrawal. At the same time, an initiative that increases demand for real estate by adding more buyers to the mix, is not particularly helpful as supply remains the biggest aspect pushing prices up.

Extended Mortgage Amortization Periods

The budget will introduce a provision for 30-year mortgage amortizations for first-time homebuyers purchasing newly built homes, starting August 1, 2024. This extension aims to make monthly mortgage payments more manageable.

Good or Bad? Again, this is a mixed bag when it comes to housing affordability. Yes, this is good news for buyers of newly built homes, as they can have lower monthly mortgage payments due to a longer amortization period. At the same time, this is an initiative that increases demand for real estate by making it more affordable for buyers without actually addressing the supply side.

Permanent Amortization Relief

Enhancements to the Canadian Mortgage Charter will include permanent amortization relief for existing homeowners meeting specific criteria, thus allowing them to reduce their monthly mortgage payments as needed.

Good or Bad? This is good news for housing affordability for specific homeowners, though it doesn’t increase supply. In essence, it seems like it will make things easier for certain types of homeowners in specific situations, likely at the expense of their lender. While it may be more of a shifting of costs, we’re all for anything that makes it more affordable for homeowners, so we’ll call this one a win.

Housing Accelerator Fund Enhancement

An additional $400 million will be added to the Housing Accelerator Fund, raising its total to $4.4 billion, aiming to fast-track the construction of an additional 12,000 new homes over the next three years.

Good or Bad? This is good news for housing affordability, with the caveat that a fund has to be disbursed and used in order for the results to be achieved. There are a lot of examples of the Housing Accelerator Fund being disbursed to municipalities and housing projects announced as a result, but having the money and people moving in are very different things. We’ll also point out that while $400 million is a lot of money, it’s about a 9% increase to the existing fund, so not a game changer.

Canada Housing Infrastructure Fund

A new $6 billion fund will support the construction and upgrading of essential housing infrastructure to facilitate more homebuilding activities. The government is looking to partner with provinces to deliver this funding, in addition to working directly with municipalities.

Good or Bad? This is definitely good news for housing affordability, as one of the under recognized challenges with building new housing supply is essential housing infrastructure is also required. Aspects such as water and wastewater systems, roads and bridges, electrical infrastructure all need to be in place at the appropriate level in order for these new homes to actually be livable.

Support for Renters

New measures for renters include launching a new $15 million Tenant Protection Fund, creating a new Canadian Renters’ Bill of Rights, and making sure renters get credit for on-time rent payments.

Good or Bad? This is bad news for housing affordability from our perspective. We say that because it’s focusing on things that are not core challenges with renting in Canada. Within Ontario, our Landlord and Tenant Board is fundamentally broken and it causes tremendous hardship for both tenants and landlords when the other side is acting in bad faith. We see zero likelihood in the feasibility of renters getting credit for on-time rental payment, as the rental market is comprised of many, individual landlords and tenants and the reporting requirements would be near impossible.

Making Your Home Cheaper to Heat and Easier on the Environment

To help Canadians lower monthly home heating costs, the government is reinvesting $903.5 million into a new Canada Greener Homes Affordability Program to support energy efficient retrofits for homeowners and renters with low- to median-incomes.

Good or Bad? We’d say this is good news, albeit on a very limited level. It doesn’t meaningfully impact housing affordability to lower utilities cost, but it can’t hurt.

Combatting Mortgage Fraud

Government will be consulting with the mortgage industry on making a tool available through the Canada Revenue Agency to verify borrower income for mortgages.

Good or Bad? It’s just a commitment to consult, so it’s hard to say how this will look or if anything will come of it. Despite that, we’d say that a tool that reduces mortgage fraud – and therefore reduces purchases and demand – is a good thing.

Investing in New Approaches to Homebuilding

Government is earmarking $50 million through Canada’s regional development agencies to support innovative housing projects, including those in modular housing, automation, and robotics.

Good or Bad? This is a good thing, but the amount seems very low and we’re not holding our breath it will result in meaningful innovation.

Providing Low-Cost Loans to Prefabricated Housing Projects

Earmarking at least $500 million in low-cost financing is to be made available through the program for new apartments that use prefabricated or innovative homebuilding techniques.

Good or Bad? It’s a step in the right direction in that it makes it more affordable for builders or developers to use new approaches to building, but will these savings be passed on to buyers or make more projects complete than would otherwise happen? Time will tell!

Offering Low-Cost Financing for Homeowners to Add Additional Suites

Proposing a new Canada Secondary Suite Loan Program, delivered by the Canada Mortgage and Housing Corporation, will enable homeowners to access up to $40,000 in low-interest loans to add a secondary suite to their homes.

Good or Bad? Our perspective on this is that it is a welcome addition that encourages adding secondary suites, but we predict a limited uptake from home owners and no meaningful increase in housing supply.

Accelerated Capital Cost Allowance Increase

The federal government is increasing the post-tax Accelerated Capital Cost Allowance from 4% to 10% for purpose-built rentals. This will act as a major incentive for the construction of a new supply of purpose-build rentals.

Good or Bad? This one’s easy – it’s a good thing! We continue to suffer from a lack of purpose-built rentals in Toronto and the GTA and we need the full gamut of affordable housing – both for owning and renting – in order for our cities to thrive.

That’s it?

There are few additional measures that the Federal government has included in Budget 2024 that are worth mentioning.

The government intends to restrict the purchase and acquisition of existing single-family homes by large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement. We’ve seen issues in the US with large corporate investors buying up housing stock and thereby driving up real estate prices, so this is a good area to consult on before Canada sees a similar situation.
The government is also considering introducing a new tax on residentially zoned vacant land and will launch consultations later this year. We’re very much against this idea, as hiking taxes on vacant lands zoned for residential is a risky measure that may result in costs passed on to new home buyers.
The government intends to establish a subsidiary of the Canada Mortgage and Housing Corporation (CMHC) to deliver flood reinsurance. While not directly impacting overall housing affordability, this is a good initiative as climate change is definitely making insurance and specifically flooding a growing concern.

All in all, a lot of measures in Budget 2024 designed to help with housing affordability in Canada.

While we are in favour of a number of the initiatives in the budget, we do feel like the Federal government has missed the market on their focus in a number of ways. While some may have limited impact, others may in fact reduce the overall effectiveness of the more impactful measures.

The new taxation measures are likely to make certain types of investment in housing less appealing and that is something we need to avoid if we’re to make housing more affordable for the next generation.

If you like talking politics, budgets and the economy – and you’re looking to buy or sell real estate – then we should really hang out. Get in touch with us and we’ll make it happen!