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HomeLatest NewsCanadian NewsRelief for Apartment Owners: Trudeau Withdraws Tax Proposal

Relief for Apartment Owners: Trudeau Withdraws Tax Proposal

Relief for Apartment Owners: Justin Trudeau’s government retracted a threat to impose a new tax regime on real estate investment trusts in Canada due to industry opposition.

Canadian Apartment REITs’ Tax Treatment Changes

  • The finance department stated no changes to the tax treatment of REITs are currently being considered.
  • This move removes a risk that has been affecting Canadian apartment REITs for over two years.
  • In March 2022, Trudeau struck a power-sharing deal with the opposition New Democratic Party to tackle the “financialization of the housing market.”
  • The Liberals had promised to review tax rules and curb excessive profits of large residential property owners in the 2021 election.
  • A change to the REIT structure, requiring corporate income tax, could have made REITs less attractive to investors.

Real Estate Industry’s Response to Government’s Renoviction Promise

  • Real estate industry argues uncertainty from government pledge raises capital cost and hinders housing supply development.
  • Finance department acknowledges REITs as a critical investment channel.
  • Renovictions refer to evicting tenants for apartment improvements, allowing higher rent charges.

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