Toronto mayor maps out issues for housing meeting
- Author: Zachary Reyes Apr 25, 2017,
Apr 25, 2017, 20:05
The non-resident speculation tax will be imposed on buyers in Ontario's Greater Golden Horseshoe - an area stretching from the Niagara Region to Peterborough - who are not citizens, permanent residents or Canadian corporations.
Once legislation passes, it will be effective retroactively to April 21.
The Ontario government unveiled its plan to implement a 15% tax on foreign home buyers and impose rent controls in an announcement on April. 20.
"This is a complex issue", Ontario Premier Kathleen Wynne told reporters.
Making it more affordable to buy or rent a home is part of Ontario's plan to create jobs, grow our economy and help people in their everyday lives. "With the tax, we are targeting people who aren't looking for a place to raise a family, they are only looking for a quick profit".
The region's housing market has seen prices jump more than 33% over a year, with the average detached house selling for $1.21-million dollars.
"We are not interested in controlling the market", said Wynne. "At the same time, we recognise the need to protect the significant investment homeowners have made".
Ontario's government also said it would expand rent controls to all private rental units, including those built after 1991, which are exempted under existing rules.
The 24-year-old has been anxious about rent increases since she started hearing reports of them in her condo building this year. "Right now, and, over the last few years, the average has been 1,500", said Jan De Silva of the Board of Trade.
He says the measures will also look at how to expedite housing supply, and he has appeared receptive to Toronto Mayor John Tory's call for a tax on vacant homes.
As of Monday, the province will require homebuyers to provide information about who they are, and how they intend to use the property, according to a new post on a provincial government webpage.
Tory said he has committed to streamlining and speeding up building approvals, in particular for new affordable rental housing and he is also looking at a vacant homes tax.
Queen's Park also has plans to review the real estate industry, checking on practices such as double ending where a realtor represents the buyers and the seller.
Simply increasing taxes on home ownership could lower the value of Toronto real estate, while doing nothing to increase the supply of homes, bringing with it the worst of both worlds.
The biggest portion of the plan - a 15-per-cent tax on foreign buyers - targets the Toronto corridor.
The package will also deal with how to expedite the availability of housing supply, Sousa said, as the government has heard complaints from builders that the process is too cumbersome.
A plan to look at practices that may be contributing to tax avoidance and excessive speculation in the housing market, such as "paper flipping" - a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
CREA said actual sales, not seasonally adjusted, were up 6.6 percent from March 2016, with gains in almost 75 percent of local markets.
To appease landlords and developers, the government said it would align property tax rates for goal rental apartments with rates for other residential properties. "Intervention in a cyclical market like housing is often fraught with peril as policies must be able to work in a strong and weak markets".
A foreign buyers tax will slow but not stop money coming from Chinese investors, said real estate broker Tony Ma, whose HomeLife Landmark Realty Inc is one of the largest brokerages in Toronto serving buyers of Chinese descent.