Ontario’s real estate landscape is changing rapidly. In 2025, new housing legislation and policy reforms are set to reshape the market for homeowners, buyers, and renters. The Ontario housing policy aims to address affordability, increase supply, and protect vulnerable groups. Here’s a comprehensive look at what’s changing, who’s affected, and what it means for you.

Key Changes in Ontario Housing Policy

Ontario’s government has introduced several major changes to tackle the province’s housing crisis. These include new zoning laws, expanded mortgage rules, and tenant protections. The focus is on making homeownership more accessible and ensuring renters are not left behind.

Zoning Reforms and Higher-Density Housing

A cornerstone of the new Ontario housing policy is zoning reform. The government is encouraging higher-density developments, especially near transit hubs. This means more condos, townhomes, and mixed-use buildings in urban areas.

• Urban Growth: Higher-density housing helps cities grow efficiently and reduces urban sprawl.
• Mixed-Use Communities: Combining residential, commercial, and recreational spaces creates vibrant, walkable neighborhoods.
• Challenges: Balancing new developments with community concerns remains difficult, as some residents worry about changing neighborhood character.

Expanded Mortgage Rules and Homeownership Access

The Canada Mortgage and Housing Corporation (CMHC) has made significant changes to help more Ontarians buy homes. These updates are central to the Ontario housing policy:

• 30-Year Amortizations: First-time homebuyers and those buying new builds can now access 30-year mortgage amortizations, lowering monthly payments and making it easier to qualify for a mortgage.
• Higher Insured Mortgage Cap: The cap for CMHC-insured mortgages has increased from $999,999 to $1.5 million. This is especially helpful in high-cost markets like Toronto, where detached homes often exceed $1 million.
• Secondary Suites: Homeowners can now add secondary suites (like basement apartments) using insured mortgage refinancing, encouraging densification and increasing rental supply.

Short-Term Impact: These changes are expected to boost home sales and slightly raise prices in early 2025, especially in expensive urban markets.

Long-Term Outlook: While helpful, these measures primarily benefit first-time buyers and may not fully resolve affordability challenges for all Ontarians.

Strengthening Tenant Protections

Ontario’s new policies include stronger protections for renters, especially in Toronto. The Rental Renovation License By-Law is designed to stop “renovictions” – when landlords evict tenants under the guise of renovations to raise rents.

• Landlord Requirements: Landlords must now obtain a license, submit permits, pay fees, and provide a plan for tenant accommodation or compensation during renovations.
• Tenant Security: These steps safeguard tenants from unfair displacement, though they may increase administrative costs for landlords and slow down necessary renovations.

Affordable Housing and Government Spending

Despite new policies, Ontario faces a worsening homelessness crisis. Chronic homelessness nearly doubled in two years, with over 81,000 Ontarians experiencing homelessness in 2024. The current government spending is not enough to address this challenge:

• Stagnant Provincial Funding: While municipalities have increased their contributions, provincial spending has not kept pace with inflation or need.
• Calls for Investment: Experts urge Ontario to double its housing budget and invest an additional $11 billion over the next decade to build 75,000 new supportive and affordable housing units.

Tax Changes and Investor Measures

To curb speculation and support first-time buyers, Ontario is considering new tax measures:

• Investor Taxes: Proposals include higher taxes for domestic and foreign investors buying non-primary residences, and a separate land transfer tax for investors36.
• Vacant Home Tax: Toronto has increased its vacant home tax from 1% to 3%, using the revenue to fund affordable housing initiatives6.
• Luxury Home Tax: New municipal land transfer taxes target luxury properties, further incentivizing affordable housing development6.

These policies aim to discourage speculative buying and prioritize homes for residents, not investors.

Streamlining Construction and Permitting

Ontario’s housing policy also seeks to speed up home construction:

• Reduced Red Tape: New legislation gives municipalities more power to fast-track developments and prioritize shovel-ready projects5.
• Affordable Homes and Good Jobs Act: Exempts affordable units from development charges, making it cheaper to build affordable housing6.
• Funding for Infrastructure: Billions are earmarked for water, wastewater, and other infrastructure to prepare land for new housing5.

However, experts warn that lengthy permitting processes and regulatory “paralysis by analysis” still slow down the pace of new builds5.

What Homeowners and Buyers Need to Know

• More Housing Options: Expect more condos, townhomes, and rental units, especially in urban centers.
• Easier Mortgage Access: First-time buyers and those purchasing new builds will find it easier to qualify for mortgages with longer amortizations and higher insured caps.
• Stronger Tenant Protections: Renters are better protected from unfair evictions, but landlords face more rules and paperwork.
• Potential Price Increases: Short-term boosts in demand may push prices higher, especially in high-cost markets.
• Focus on Affordability: While new policies help, deeper investments and broader tax reforms are needed to ensure truly affordable housing for all.

Ready to Navigate Ontario’s Changing Real Estate Market?

Contact Bridge for expert guidance on buying, selling, or investing under the new Ontario housing policy. Our team can help you make informed decisions and find the right opportunities in 2025 and beyond.