CP says Ontario will levy 15% tax on foreign home buyers

Morneau offered to share the data Ottawa is gathering on housing markets with the other two levels of government. "They wonder how they are ever going to get their starter home", he said.

With its 16-point plan, the government is "hoping they have it right, but they don't really know", says Moscovitch.

Toronto's lakefront along Lake Ontario has become home to high-rise towers, many of which have sold units to offshore buyers. In the GTA, sale prices have skyrocketed by 33% in one year.

Wynne said the measures were created to help people afford to rent or buy a home, brushing off a suggestion that the move was more about boosting her approval rating, which has recently plunged to just over 10 per cent, according to polls.

Sousa said the tax would take effect on Friday.

"In some ways, we have to realise that this is a good problem to have", Wynne said.

"I just wish they'd moved months earlier on the rental rules to avoid a lot of people getting hurt", he said.

- With files from The Canadian Press.

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 stabilise prices without crashing the market.

"This is a complex issue", Ontario Premier Kathleen Wynne told reporters. "We could have found a real practical alternative.so that this didn't occur and so that we still have room for different people renting".

"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.

"I think, and most people would think, that they should be able to live in a place they can afford and not have to worry about suddenly facing insane rent".

Most of the actions aimed at increasing the supply of homes are centered around the development of new rental apartment buildings.

"I look at housing as a place to live for people in this city. Our view of the world is if you want to stabilize the marketplace, it's going to be about bringing those development approvals to the market".

"A strong housing market reflects Ontario's strong economy".

The 15 per cent levy would apply to non-Canadian citizens, non-permanent residents and non-Canadian corporations buying residential properties containing one to six units in the greater Toronto area, the provincial government said in a statement on Thursday.

A spokesperson for Minister of Housing and Poverty Reduction Chris Ballard said the rules do not apply to rent increase notices given before Thursday April 20.

Strengthen the Residential Tenancies Act, including a standard lease with multilingual information, tightening provisions for "landlord's own use" evictions, and ensuring adequate tenant compensation if evicted.

- Identify surplus provincially owned land that could be used to build affordable housing. Once legislation passes, the tax would be effective retroactively to April 21. The City of Vancouver also imposed a tax on vacant homes.

The new plan will expand rent control to include all Ontario buildings constructed after 1991.

- More flexibility for municipalities when it comes to using property tax tools to encourage development.

What Sousa didn't say is that the Liberals have more than doubled Ontario's debt to more than $300 billion since coming to power in 2003, which has made Ontario the most indebted sub-sovereign (non-national) borrower in the world.

The province also indicated that they have a number of things on their To Do list including looking into assignments of new construction properties and providing more transparency into real estate transactions.

Canada's largest province is implementing a 15% foreign buyer's tax in Southern Ontario.

  • Zachary Reyes