Higher down payment eyed for housing investors

February 10, 2022


Housing Minister Ahmed Hussen: curbing “excessive profits.”
| Canadian Immigrant

The federal government is considering raising the down payment required for those buying a second home.
In a December 2021 mandate letter sent from the Prime Minister, Housing Minister Ahmed Hussen was specifically directed to “review the down payment requirements for investment properties” and develop policies to “curb excessive profits” in that housing segment.
In 2021, over a quarter of all home purchases were made by buyers who already own a home, according to data from Teranet.
“Our government is looking at every tool at our disposal to tackle these challenges head on,” the Ministry of Housing and Diversity and Inclusion, and Canada Mortgage and Housing Corporation (CMHC) told the Financial Post in a statement. “By developing policies to curb excessive profits in investment properties, protecting small independent landlords and Canadian families, and reviewing the down payment requirements for investment properties, we are targeting the issues the market is facing from multiple angles.”
The government has not yet released details on potential changes to investment property down payment rules that are being considered nor has it provided a timeline for any announcements. Also, there is no official definition of what is meant by “excessive profit.”
Currently, non-owner-occupied rental properties in Canada with up to four units require a down payment of at least 20 per cent by most lenders.
A recent survey by RATESDOTCA and BNN Bloomberg found that of respondents who had purchased a home within the last 18 months, nearly one in five already owned multiple properties.