- Urban 411
- Posts
- Rentals, Taxes, and Tariffs
Rentals, Taxes, and Tariffs
This week, we explore how rising tariffs could impact housing costs, a surge in rental vacancies in the GTA, and Montreal’s strict new short-term rental rules.
Today, we’re covering
💸 Tariffs Could Spike Housing Costs in Canada
🥵 Florida Market Feels the Heat as Canadians Exit
📈 GTA Sees Highest Rental Vacancy Rate Since Pandemic
📝 Montreal Cracks Down on Short-Term Rental
🤑 Canada Pushes Back Capital Gains Tax Changes to 2026
🤔 WTF of The Week
Read Time: 4 minutes
💸 Tariffs Could Spike Housing Costs in Canada
A looming U.S.-Canada trade war could increase construction and renovation costs, impacting the housing market.
Building materials most affected could include glass ($3.5B in imports), appliances ($3B), hardware ($2B), and metals ($14B+ in 2023 imports).
Canadian softwood lumber, already hit with U.S. duties, could face further tariffs, worsening long-term supply issues.
Why This Matters: Developers fear delays and cancellations, especially in high-cost markets like the GTA, where stalled projects are already common. Short-term effects could include higher home prices and renovation costs, which would be passed on to buyers.
🥵 Florida Market Feels the Heat as Canadians Exit
A weak Canadian dollar (69 cents USD) has significantly increased snowbird costs, making U.S. property ownership less sustainable.
Soaring insurance premiums have pushed costs up dramatically, with some Florida homeowners paying over $16,000 annually—10 times what they initially paid.
Property taxes have more than doubled, jumping from $1,500 to $4,000+ annually for many owners.
Canadians account for up to one-third of foreign-owned listings in Florida, impacting regional markets like Sarasota.
Why This Matters: A surge in Canadian-owned listings may lead to price softening in Florida’s most snowbird-heavy areas. Rising insurance and tax costs make Florida riskier, especially for international investors. Investors should monitor inventory trends, as continued sales from Canadian owners could create a prolonged correction.
(source)
📈 GTA Sees Highest Rental Vacancy Rate Since Pandemic
Vacancy rates in purpose-built rentals in the GTA rose to 3.4% in Q4 2024, up from 2.5% a year earlier.
Purpose-built rental completions totaled 5,537 units in 2024, 86% higher than the 10-year average but slightly lower than 2023.
An even larger surge in new rental supply is coming, with 8,872 units expected for 2025, a multi-decade high.
Condo completions reached a record 29,800 units, with half entering the rental market, increasing supply pressures.
Why This Matters: The decline in new rental construction could lead to tighter supply, making this a short-term window for affordability. Rising vacancies and record supply create short-term challenges for landlords to maintain rental income. Renters have more bargaining power, as competition forces landlords to offer discounts and incentives.
📝 Montreal Cracks Down on Short-Term Rental
Montreal will only allow short-term rentals (like Airbnb) in primary residences from June 10 – Sept. 10, limiting year-round rentals to designated zones.
Over half of Montreal's 4,000 Airbnb-style rentals are illegal, and the city hopes this move will return 2,000 units to the long-term market.
New rules will shift the burden of proof to property owners, making it easier for inspectors to fine offenders.
Illegal listings will face $1,000 daily fines, increasing to $2,000 daily for repeat violations.
The number of inspectors will increase from 4 to 10, improving enforcement capabilities.
Why This Matters: Investors relying on short-term rentals will face major restrictions, limiting earning potential outside of the summer season. Montreal’s rental supply is expected to increase, which could stabilize rents but may not lead to drastic affordability improvements. Hotel prices may rise, benefiting traditional accommodations but hurting tourism-dependent businesses.
(source)
🤑 Canada Pushes Back Capital Gains Tax Changes to 2026
The federal government has delayed the capital gains inclusion rate increase from June 25, 2024, to January 1, 2026
The proposed change would increase the taxable portion of capital gains from 50% to 66.7% for companies and individuals earning over $250,000 in capital gains annually.
The lifetime capital gains exemption is increasing to $1.25 million, reducing taxes on small business shares and farm/fishing property sales.
A new $250,000 annual threshold for individuals and couples means that when sold, secondary properties (like cottages) may receive tax relief.
🤔 WTF of The Week
By Reddit user Funny_Holiday_3627
This buyer is discovering the harsh realities of "phantom rent," which refers to occupancy fees you owe the developer after receiving the keys but before the condo is officially registered. You're paying for a unit you technically don't own yet during this period — which can last from a few months to a year. In this case, the buyer is looking at potentially $6,000 a month, adding up to a staggering $30,000 to $80,000 before registration.
Walking away from the deposit may sound tempting, but it doesn’t mean you’re free of liabilities. If the unit is underwater — and with condos expected to drop $150,000 to $200,000 in value by closing, it likely will be — the developer will come after you for the difference. Developers are fully prepared for this; their lawyers have templates ready to pursue delinquent buyers in court.
Moral of the story? Pre-con buyers need to understand the fine print — especially when market conditions turn
How cooked is he? 🥵(vote below) |
🛠 Our Trusted Providers
Tired of dealing with riff-raff service providers in real estate? These are our Trusted Providers—handpicked by Urban 411, so you can leave the guesswork at the door./
HomeAbroad
Your One-Stop Solution for Canadian Investments in U.S. Real Estate
Unlock the U.S. property market with HomeAbroad’s 30-year fixed-rate mortgages, tailored specifically for Canadian investors! With no need for a U.S. credit history, you can qualify based on the property’s income rather than personal income or assets. Start your U.S. investment journey with ease. 👉 Get a Free Mortgage Rate Quote Now
Zown
Empowering Canadian home buyers with innovative solutions.
Zown is reshaping the home-buying journey with offering 1.5% cash back on purchases. Their growing realtor network also enables licensed agents to unlock additional income while providing unmatched value to homebuyers. 👉 See Zown’s Offering
Cardinal Law
The law firm for real estate investors in Ontario
Virtual, paperless, and secure for stress-free REI and private lending deals. Urban 411 members get a free corporate structure review, free will & estate plan review, plus 10% off any related work. 👉 Learn More About Cardinal Law
SingleKey
Your go-to solution for tenant screening and rent collection.
Protect your rental investments with SingleKey’s comprehensive tenant screening and automated rent collection service. Urban 411 subscribers get 10% off Tenant Screening with SingleKey. 👉 Get Your Tenant Report Today
Want Real Insights on the Global Economy? Start Here.
Trade wars, shifting policies—are we on the brink of market turmoil? Staying informed has never been more important. That’s why we read The Daily Upside. Join 1M+ readers and subscribe for free today.