Impact of Ontario housing measures on market may be short-lived
Apr 21 2017
- A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
Despite the focus on foreign speculators, the government has admitted it doesn't have good data on the real estate market.
"I have three millennials at home, adults in their 20s".
Ontario Finance Minister Charles Sousa says "property scalping" is limited to newly-constructed homes. Wynne said the tax is not about targeting immigrants.
Home prices in the Toronto region rose 6.2 per cent in March, the biggest one-month gain on record, according to a benchmark price index by the Canadian Real Estate Association, and jumped nearly 30 per cent in the past 12 months. He has warned as far back as the 2012 annual meeting that Canada's housing prices could be too high.
The issue has become a headache for the province's Liberal government, which is trailing the Progressive Conservatives in polls ahead of an election in June next year, and lawmakers face a hard balancing act to find policies that will stabilize prices without crashing the market.
"Nobody wants to crash the market".
The Ontario speculation tax appears similar to one British Columbia implemented in Metro Vancouver last August, when foreign nationals purchasing property were slapped with a 15 per cent levy. "I'm very mindful of any unintended consequences from the measures that we take", he said. Prices in Vancouver were down 9 percent in March from a year ago, according to the Canadian Real Estate Association. Asian investment in Toronto reportedly picked after Vancouver introduced its foreign buyer tax last summer.
FHP's promotion of rent control to all private rental units, including those built after 1991 to protect tenants from sudden rent increases; encouraging Toronto and other municipalities to introduce a tax on vacant homes to motivate owners to sell or rent unoccupied units; help in identification of provincially owned surplus lands that could be used for affordable and rental housing development.
"This is a complex issue", Ontario Premier Kathleen Wynne told reporters. Tenants in newer units have complained of dramatic spikes in rent.
- Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
CIBC economist Benjamin Tal says the measures are likely to cool the market over the next six months as many buyers wait to see the impact of the changes.
"We expect the measures to slow down activity in Toronto's housing market in the near term, not only due to their direct impact but also due to the impact of the uncertainty regarding their ultimate impact on potential buyers", he said.
There will be a new five-year $125-million program to encourage the construction of new rental apartments by rebating builders a chunk of development charges.