Published: Fri, April 21, 2017
Economy | By Melissa Porter

Ontario, Canada brings in foreign housing tax to cool market

Ontario, Canada brings in foreign housing tax to cool market

The area, which stretches from the Niagara Region to Peterborough, Ont., is home to about 9 million people and is one of North America's fastest growing regions.

If legislation passes, the tax would be effective retroactively to April 21. She says that while she's rented for years in the city, she's been unable to find a new apartment with a rent she can afford.

Sydney, Singapore and Hong Kong have also introduced foreign buyers taxes. As of Monday, however, homebuyers are required to give information about their residency and citizenship status and how they intend to use the property.

In Vancouver, home sales plunged and price growth stalled for several months following the B.C. government's introduction of a 15 per cent tax on foreign buyers.

"People are betting that our future is going to be bright", Ontario Premier Kathleen Wynne told a news conference.

However, Kavcic said the impact in Toronto could be more muted than it was in Vancouver, as the tax is not coming as a surprise and there are more exemptions.

The latter led to a cooling of the Vancouver market after the average price for a detached single-family house reached a record high of Can$1.5 million in May 2016. "They are only looking for a quick profit or a safe place to park their money", Wynne said.

Sousa says investing in real estate is not a bad thing, but he wants speculators to pay their fair share. "When young people can not afford their own apartment or can not imagine owning their own home, we know we have a problem. and we know we have to act".

Murphy says companies that he lobbies for currently have about 28,000 rental units "in the pipeline" that are ready to be built, but now many will likely be abandoned due to the threat of rent controls.

As well, rent controls limiting increases on all buildings to the rate of inflation - as long as it is 2.5 per cent or lower - will be introduced. Those have averaged two per cent in the last 10 years and this year it is 1.5 per cent.

Tenants will benefit from the government's additional move to standardize rental agreements, Dent said, which will mean landlords won't be able to hit tenants with extra fees and charges.

In Ontario, according to Sousa, property scalping involves only new developments.

The 16-point strategy includes measures such as a proposed 15 per cent foreign buyers tax, an opportunity for municipalities to tax vacant homes, and perhaps most importantly, sweeping rent control measures that will be felt particularly heavily in the GTA, where some steep hikes in monthly rents have forced some tenants from their homes.

Souza met with his federal counterpart Bill Morneau and Toronto Mayor John Tory on Tuesday to discuss potential measures. "That's why we're bringing forward this package".

The provincial Liberal government's housing plan contains 16 measures in total.

She added that the province will review the rules surrounding real estate agents to ensure buyers are getting a fair shake in bidding wars.

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