Greater Vancouver REALTORS®, along with REALTORS® across Canada, will present two proposals to their local MPs that will benefit home buyers and investors.

Proposal 1: the Home Buyers' Plan (HBO)

Since the early 1990s, REALTORS have made headway with the HBP, convincing the government to:
   • implement the HBP as a trial allowing Canadians to use RRSPs for down payments
   • make the HBP permanent
   • raise the amount of RRSPs that home buyers can use to $25,000 from $20,000.

Now we're asking the government to index the HBP to the Consumer Price Index in $25,000 increments similar to tax free savings accounts. We think this will help make sure the HBP never loses its buying power.

Proposal 2: deferral of recaptured capital cost allowance

In previous years, we’ve asked the federal government to defer capital gains taxes and the recaptured capital cost allowance when an investment property is sold and the proceeds of the sale are reinvested in another property within one year.

But this year, we reviewed this reinvestment proposal and its total price tag of $500 million and decided that it was too much in this time of deficit reduction and returning to balanced budgets.

To get an idea of what the government might be willing to do in this area, CREA evaluated the previous proposal, identified challenges and developed a renewed and revamped reinvestment proposal.

The new proposal: stimulate community reinvestment
When an investor buys an income property, they can annually write off a fixed percentage of the original cost of the building against their net rental revenue. This is known as capital cost allowance.

When the investor sells the property, the written-off depreciation amount and the resulting tax are often significant. This means investors won’t have enough money to buy another property so they hold off selling.

To encourage reinvestment, we’re now asking the federal government to allow investors who sell a property and reinvest in another property to defer previously written off depreciation.

In this proposal, the capital cost allowance is not given preferential treatment and this form of deferral does not set a precedent because real estate developers are already allowed to defer capital cost allowance.  

Benefits
   • level the playing field for small real estate investors who now make up more than half of all investors according to research by University of Toronto economic professor Thomas Wilson
   • generate significant economic spin-offs since the sale of each multi-unit residential income property results in $287,000 in economic spin-offs and more than one job for every two transactions
   • gentrify deteriorating buildings in neglected parts of towns and cities through renovations, retrofits and redevelopment
   • reduce the carbon footprint through retrofitting
   • create additional rental housing units 
   • generate GST/HST and income tax revenue from spin-off activity for the federal government

Learn more about our Government Relations activities.