Legal Corner

Government Press Release

Wed, 04 Dec 2024 19:02:36 GMT

taken from gov Canada

Mortgage Insurance Rule Changes to Help Homeowners Add Secondary Suites

The Canadian government is introducing new mortgage insurance measures to help homeowners turn unused spaces, like basements or garages, into rental units. Effective January 15, 2025, these changes aim to increase housing supply and provide homeowners with new income opportunities, particularly seniors who wish to age at home.

The New Refinancing Program

Under the updated rules, homeowners can refinance their properties with insured mortgages to fund the construction of secondary suites. Borrowers can access up to 90% of their property’s value, including the value added by the new units, with a maximum amortization of 30 years. This makes it more affordable for homeowners to create fully self-contained units, such as basement apartments or laneway homes, provided they meet local zoning requirements.

Key Eligibility Requirements

The homeowner or a close relative must occupy one of the existing units.
The property’s total value, including improvements, must be under $2 million.
Additional financing must not exceed project costs.
The new units cannot be used as short-term rentals.
The property must have no more than four total units after improvements.

Broader Impact

These measures align with municipal zoning reforms supported by the Housing Accelerator Fund, which aim to increase density and address Canada’s housing affordability crisis. By streamlining processes and reducing financial barriers, the government hopes to unlock the potential of underutilized spaces while offering more affordable housing options for Canadians.

This program reflects the federal government’s commitment to using innovative solutions to address housing shortages. If you're a homeowner considering adding a rental suite, now might be the time to explore how these changes could benefit you. Stay tuned for more updates as this program rolls out in early 2025.

gov canada

Laneway Housing Advisors

Wed, 04 Dec 2024 18:45:33 GMT

The last few weeks have seen a plethora of housing and mortgage initiatives aimed at improving the overall landscape for Canadians.

To those looking to refinance a single family dwelling the government is allowing Insured Refinances to 90% and with higher limits (eg. to $1.5M).

In addition the federal government has announced even higher financing limits (for insurable mortgages) to those wanting to fund secondary & multiplex units

The federal government also said it is increasing the mortgage insurance home price limit to $2 million for those refinancing to build a secondary suite, saying this will ensure homeowners can access their refinancing in all housing markets across Canada.

On most residential properties a proponent can add a garden suite or laneway house, at a cost of about $500 per square foot for the build (less than half the price of a new Toronto condo).
Most houses can be converted to a 2, 3 or 4-plex - as of right with no development cost charges.
Most lots can support a tear-down and new build with up to 5 units (4-plex plus garden suite or laneway house).
The FSI (floor space index) and many height/storey rules do not apply to 2, 3 and 4-plex conversions and new builds, so in many cases they can contain twice - or even more - square footage than a regular SFD. For example, a lot that might only support a single 2,600 square foot 2-storey house can now have maybe 5,400 square feet over 4 units, and be 3+ floors in height.
Properties on "major streets" (or even backing onto them) like Pape, Runnymede, Royal York, Warden, Sheppard etc. qualify for townhouse or apartment builds up to 6 storeys tall and containing up to 60 units.

Laneway housing

HST Implications on the Sale of Short-Term Rentals

Tue, 03 Dec 2024 18:22:25 GMT

this information was taken from close my home legal insights

Switching a property from long-term residential use to short-term rentals, like Airbnb, can lead to significant GST/HST liabilities upon sale due to the change-in-use rule under the Excise Tax Act. If over 90% of the property's use involves short-term stays (less than 28 days), it may be deemed taxable.

For example, in 1351231 Ontario Inc. v. The King, brief short-term rental use triggered an $80,000 HST reassessment.

To avoid unexpected costs, property owners should understand the timing rules, consult tax experts, and consider strategies to reduce liabilities while staying compliant.

please click here to learn more closemyhome

Big Changes for Ontario Homeowners: What You Need to Know About NOSIs

Mon, 04 Nov 2024 19:29:05 GMT

Source: This summary is based on information provided by Close My Home, a law firm offering insights into the new NOSI legislation in Ontario. For the full article and more details, visit Close My Home.

In June 2024, the Ontario government introduced the Homeowner Protection Act, which significantly impacts Notice of Security Interest (NOSI) registrations on real estate titles. This change is crucial for homeowners, potential buyers, and anyone involved in property transactions in Ontario. Here’s what you need to know about how this affects your property rights, especially when it comes to consumer goods.

What is a NOSI?

A Notice of Security Interest (NOSI) is a claim or "lien" that allows creditors to secure their interest in rented items—often major appliances like water heaters or air conditioners—by placing it on the title of a home. Previously, NOSIs could alert potential buyers and other interested parties that these items were not fully owned by the seller.

Key Changes Under the Homeowner Protection Act 2024

No More NOSIs for Consumer Goods:
- As of June 6, 2024, creditors can no longer register NOSIs for consumer goods (e.g., HVAC equipment, water softeners) on real estate titles. Registered NOSIs on consumer goods before this date are now considered expired and can be removed with assistance from a lawyer, although legal fees may apply.
Consumers Still Have Financial Responsibility:
- Importantly, removing a NOSI from the property title doesn’t cancel the rental contract. Homeowners are still liable for payments. Creditors may take alternative measures, such as reporting defaults to credit bureaus, which can impact consumers’ credit scores.
New Registrations and Exceptions:
- NOSIs for items outside the definition of "consumer goods" under the Personal Property Security Act can still be registered, but they now require confirmation from a lawyer.

What This Means for Homeowners and Buyers

For homeowners, the new law creates a more transparent process, allowing them to remove outdated NOSIs and reduce complications during property sales. Buyers will no longer inherit hidden financial liabilities on consumer goods tied to the property.

Final Thoughts

These changes represent a shift towards a more consumer-friendly real estate market in Ontario. For a smooth and secure transaction, consult with your real estate lawyer on any NOSIs that may apply to your property.