Press review of early November

Several municipalities have recently filed a new property assessment roll, including Montreal. These will have an impact on municipal (property) taxes, with buildings that have increased in value more than the average seeing their taxes rise and vice versa; the economic situation with rising interest rates and mortgages, especially variable ones, creating difficulties for homeowners; and urban planning issues in a few areas of the province, ranging from the promotion of single-family homes in Lévis to the appearance of a registry for short-term rentals in Magog.

Property taxes

In Montreal, the president of the executive committee, Ms. Olliver, says that property taxes will increase by 3% to 6%. According to La Presse, the mayor of Montreal had recently promised that the tax increase would not reach inflation. In fact, it was at the conclusion of the first forum on taxation that Valérie Plante stated, one year to the day after her re-election in 2021, "that the current financing model is archaic and completely disconnected from responsibilities and the way in which revenue sources are generated," according to this article in the Journal Métro. The forum was intended to raise awareness among government stakeholders of the need for the city to diversify its revenue sources in anticipation of the fiscal pact negotiations with the Quebec government in 2024.

With respect to the increase in the property assessment roll released in September, a petition is currently circulating that calls for the increase to be based on 2019 data and for a 2% cap on property tax increases. The problem, according to one of the co-signers, is that the property assessment was based on a real estate "boom" year that overvalued the current value of properties. Moreover, the CORPIQ gave its point of view in this same article of the Journal Métro by reminding that there is a way for a property owner to demand a revision, for a fee. It should be noted that in Rimouski, the property roll has jumped by nearly 15%. In an article by TVA Nouvelles, Marc-André Plante, Director of Public Affairs and Government Relations at CORPIQ, took the opportunity to mention that a probable 6% tax increase hurts property owners in a context of inflation, but also tenants, since the increase in property taxes is transferable to rents.

 

Economic Concerns

With the successive increases in the Bank of Canada's key interest rate, real estate owners with variable rate mortgages are beginning to feel the effects, especially small owners who are dipping into their funds to offset the increases. As CORPIQ's Director of Public Affairs and Government Relations pointed out with data from a survey of its members, nearly 60% of CORPIQ members are homeowners with variable rate mortgages. Significant rent increases are also to be expected for units that fall under F clause, i.e. units within a building built less than 5 years ago. Across the country, 53% of Canadians are concerned about their mortgage renewal with the sharp rise in interest rates, according to an article in Canadian Mortgage Trends. As reported in a Radio-Canada article, in the words of a licensed insolvency trustee, homeowners have been hit hard since March. CORPIQ has also published an article on its website that specifically addresses the situation of plex owners.

 

Urbanization

In Levis, the housing shortage could be filled by a densification program near the bridges, but this program involves the purchase of properties by a real estate developer who wants to build condo towers. In this Radio-Canada article, it is mentioned that the developer continues to acquire properties while some residents are reluctant to sell their property. In Quebec City, the focus is on the supply of single-family properties. As described in Le Soleil, a builder is developing a 180-door subdivision that may stem the exodus of young families to outlying municipalities. Quebec City's economic development advisor notes that there has been a phenomenon of urban sprawl since 2001 caused by young households moving to neighbouring RCMs. Speaking of housing supply, more and more municipalities could turn to what is called secondary suites. As described in this article, this is a way to create soft densification by adding an extra residence on the lot of a property, which is prohibited in most cities in Quebec, but allowed in Vancouver and Toronto. On another note, in Magog, a regulatory amendment process is underway to maintain the status quo on the regulation of short-term rentals (AirBnb type). It should be remembered that Quebec regulations will allow owners to rent out their principal residence on a short-term basis for less than 31 days as of March 2023. The City of Magog wishes to amend its by-law to maintain the ban on this type of rental, unless a petition acquires enough signatures in a given area to allow a referendum to be held to lift the ban.