Ontario, Canada brings in foreign housing tax to cool market

Andrew Cummings
April 21, 2017

"You're looking to raise your family and grow in the community and you're being outbid and outpriced by people that are just using it as a commodity", said Fred Altbaum, 34, a marketing professional struggling to buy a home with his wife and daughter. There is very little data available on the number of vacant homes in the region, and speculation - which this tax would effectively try to curb - tends to account for a very small proportion of the market. In January B.C. Premier Christy Clark announced the tax would be lifted for those who have a work permit in order to encourage more people to come to the province to work.

Excluding Greater Vancouver and Greater Toronto, the average price was $389,726.

Toronto Real Estate Board reported that in March 2017, the average selling price rose from $688,011 a year earlier to $916,567, with similar annual rates of growth in the low-rise and condos. "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". The provincial government is "aware that a response is needed now to address recent dramatic increases in rents and home prices", he said.

Tenants groups welcomed the move.

The Canadian Taxpayers Federation (CTF) is calling on the province to stop plans to impose a new foreign buyers tax and rent control.

"History has shown us that rent control leads to slums". Government lands will also be opened up to development and builders will receive tax incentives for the construction of apartments.

"We've already known for months that this was probably coming down the pipeline, versus Vancouver where you woke up one morning and there was a 15 per cent tax", he said.

"A lot of local buyers will sit on the sidelines for a while to watch and see what happens, and then that pent-up demand will re-enter the market down the road once the fear and the unknown has passed", said Blair Mackey, a sales representative with Royal LePage Real Estate Services.

Neither of Ontario's opposition parties objected to any of the government's proposed measures. Progressive Conservative Housing Critic Ernie Hardeman said the measures are moving "in the right direction".

It will hit all residential transactions in the Greater Golden Horseshoe - including the Greater Toronto Area, Niagara, Kitchener-Waterloo, Barrie, Orillia, and Peterborough. Currently, they only apply to buildings constructed before November 1991.

His Ontario counterpart, Charles Sousa, says the provincial budget that he will table next week will include a package of measures aimed at improving house affordability in the Greater Toronto Area. The City of Vancouver also imposed a tax on vacant homes.

One expert says potential solutions in Ontario could be the same ones we need here. This will contribute to our strengthened enforcement efforts.

Wein said everyone, government included, needs to be careful not to rely on "anecdotal" stories about the real estate market.

- Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority. Others, however, believe the figure was much higher.

Other reports by iNewsToday