Monday, 24 July, 2017

Ontario, Canada brings in foreign housing tax to cool market

Ontario, Canada brings in foreign housing tax to cool market Ontario imposes tax on overseas buyers to rein in housing prices
Juana Turner | 21 April, 2017, 00:15

The province will also expand rent control to all private rental units, including those built after 1991.

A rapid acceleration in home prices in Toronto has prompted some economists to voice fears the real estate market in Canada's largest city is in a bubble and raised concerns about the ability of first-time buyers to afford a home.

Once legislation passes, the non-resident speculation tax would be effective retroactively to April 21.

Sydney, Singapore and Hong Kong have also introduced foreign buyers taxes.

Sousa says investing in real estate is not a bad thing, but he wants speculators to pay their fair share.

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.

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 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.

Federal finance minister Bill Morneau welcomed Ontario's housing package, saying the measures aren't aimed at increasing demand, but instead look at ways to deal with speculation in the market. Government lands will also be opened up to development and builders will receive tax incentives for the construction of apartments.

It will hit all residential transactions in the Greater Golden Horseshoe - including the Greater Toronto Area, Niagara, Kitchener-Waterloo, Barrie, Orillia, and Peterborough.

Toronto's surging real estate market has triggered debate over whether non-Canadian speculators are bidding up homes and fuelling unsustainable record price gains, or if a lack of housing supply and inadequate urban planning is more to blame.

- The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed.

Before imposing any new measures on real estate agents, Ontario government said, it will review the regulations governing the industry, including the body representing agents (the Ontario Real Estate Association) and the provincial regulator (The Real Estate Council of Ontario), CBCNews reports said. "We sometimes get requests to buy multiple units, and I don't allow that to happen, because I question why anyone would need more than one unit and it sort of sparks the idea that maybe they're speculating on real estate".

- Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.

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