The Canadian government is taking decisive steps to address the housing crisis by transforming underused spaces into homes and empowering homeowners to increase housing density. With a housing plan aimed at building 4 million homes by 2031, the federal government has announced significant measures to unlock vacant lands, retrofit underused federal properties, and support secondary suite construction.
Here’s a detailed look at the latest announcements and their implications for homeowners, communities, and Canada’s housing market.
Table of Contents
Unlocking Secondary Suites: Mortgage Reforms and Loan Programs
The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, unveiled mortgage insurance reforms and the upcoming Canada Secondary Suite Loan Program (CSSLP). These initiatives aim to make it easier for homeowners to build secondary suites—such as basement apartments or laneway homes—helping to alleviate housing shortages and provide additional income streams for families.
Key Details of the Mortgage Reforms
Starting January 15, 2025, homeowners can:
- Refinance Mortgages for Secondary Suites
- Access up to 90% of their home’s value, including the value added by the suite(s).
- Benefit from 30-year amortization periods for refinanced, insured mortgages.
- Finance the construction of up to four secondary rental units.
- Increased Home Price Limit
- The insured mortgage home price cap will rise to $2 million for secondary suite construction, ensuring access in high-demand markets.
These reforms align with Canada’s broader housing affordability goals by encouraging multi-generational living, increasing rental supply, and enabling homeowners to offset mortgage costs.
Canada Secondary Suite Loan Program (CSSLP)
In addition to refinancing, homeowners will soon have access to low-interest loans under the CSSLP. More details about this program, which will help fund renovations or new construction, are expected by the end of the year.
$80,000 Canada Secondary Suite Loan Program 2025 with Low interest rate of 2%
Pros and Cons of Canada’s New Federal Secondary Suite Program Loan & Refinance
Taxing Vacant Land: A New Path for Development
To address the issue of idle land, the federal government is consulting provinces, territories, and municipalities about implementing vacant land taxes.
Proposed Framework
The tax would apply to residentially or mixed-use zoned land that is:
- Vacant and undeveloped;
- Serviced by municipal infrastructure (e.g., water, sewage, electricity);
- Physically developable.
Goals of the Tax
- Encourage Development: Incentivize landowners to build homes instead of holding properties vacant.
- Discourage Speculation: Make it less profitable to speculate on land appreciation.
- Generate Revenue: Funds from the tax could be reinvested into housing projects.
This measure aims to maximize the potential of vacant properties, turning them into homes and increasing housing availability in urban areas.
Canada Public Land Bank: Turning Federal Properties into Homes
The Honourable Jean-Yves Duclos, Minister of Public Services and Procurement, announced the addition of 14 underused federal properties to the Canada Public Land Bank. These properties—located in cities such as Vernon, Ottawa, and Québec City—are part of a larger initiative to develop housing on surplus federal lands.
Key Milestones
- 70 federal properties unlocked to date, paving the way for 250,000 new homes.
- Launched in August 2024, the Public Land Bank is central to the Public Lands for Homes Plan, which partners with governments and housing providers to build middle-class homes.
Upcoming Developments
The federal government has allocated $500 million to establish the Public Lands Acquisition Fund. This fund will allow Ottawa to purchase additional land for housing projects, further accelerating construction.
New Mortgage Options for Homebuyers
The government also announced reforms designed to make homeownership more accessible, including:
- Raising the Insured Mortgage Price Cap
- Increased from $1 million to $1.5 million, reflecting current housing market realities.
- Aims to help more Canadians buy homes with lower down payments.
- Expanding 30-Year Mortgage Amortizations
- Available to first-time buyers and purchasers of new builds, including condos.
- Reduces monthly mortgage payments, making homeownership more affordable.
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Additional Housing Incentives
Other measures to address housing challenges include:
- Multigenerational Home Renovation Tax Credit
- A refundable tax credit of up to $7,500 for families renovating to accommodate seniors or disabled relatives.
- Increased Support for New Builds
- Incentives to boost construction of new homes, condos, and rental units.
Building a Brighter Future for Housing in Canada
With these bold actions, the federal government is leveraging every available tool to address Canada’s housing crisis. By transforming underused spaces into homes, increasing access to financing for secondary suites, and unlocking the potential of vacant lands, these measures aim to create a housing market where every Canadian has access to an affordable home.
Quotes from Leaders
“We must use every possible tool to build more homes and make housing affordable for every generation of Canadians.”
– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
“Safe, accessible, and affordable housing options are out of reach for far too many Canadians. Our efforts to unlock public lands for housing are meeting a scale not seen in generations.”
– The Honourable Jean-Yves Duclos, Minister of Public Services and Procurement
“Our government is unlocking new opportunities for homeownership, helping young Canadians and families face today’s tougher housing market with more options for their future.”
– The Honourable Terry Beech, Minister of Citizens’ Services
By turning underused spaces into solutions, Canada is building toward a future where housing is a right, not a privilege.
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