2020 Economic Outlook

Legislation and policies – promoting a healthy housing market April 2020 – Department of Finance ■ The benchmark rate used in the insured mortgage qualification stress test changing to the median contract rate on all insured mortgages, making the stress test more responsive to actual market rates. OSFI is considering a similar change for uninsured mortgages February 2018 - Government of British Columbia ■ The B.C. government introduced a 30-point plan to address housing affordability issues. It included a new speculation tax (2% of assessed value) on homeowners who do not pay income tax in the province and increased in the foreign buyer tax to 20% from 15% January 2018 - OSFI Qualifying rate for uninsured mortgages raised to 2 percentage points above the contract rate or the five-year posted rate, whichever is higher April 2017 Government of Ontario ■ Introduced the 'Fair Housing Plan': 16 measures to address risks in the housing market including a 15% speculation tax on non-residents purchasing homes in the Greater Golden Horseshoe region January 2017 - City of Vancouver Vancouver introduced a tax of 1% of the assessed value of each home which is vacant (principal residence is exempt) October 2016 – Department of Finance ☐ ◉ Qualifying rate for high-ratio mortgages with a term of five years or more is changed to the 5-year posted rate Portfolio-insured low-ratio mortgage loans must meet the eligibility criteria of high-ratio insured mortgage ■ A principal residence sale must be reported in the seller's tax return, even if any capital gain is protected by the principal residence exemption July-August 2016 - OSFI & the Government of British Columbia ■ OSFI increased scrutiny on mortgage underwriting standards: greater emphasis on internal controls, risk management practices and market developments BC government introduced a property transfer tax of 15% on foreign buyers registering the purchase of a home in Metro Vancouver 36 | CANADIAN HOUSING MARKET RBC

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