Ontario set to slap foreign buyers tax to cool Toronto property market

Andrew Cummings
April 22, 2017

Such rules could still be coming, said Tal. A similar tax in Vancouver brought sky-high prices down initially, but they're creeping back up, suggesting the measure's effect may have been only temporary. "They themselves have said, you know, we want to make sure our sales practices are appropriate, they're transparent, that buyers and sellers understand what's happening in the marketplace".

This multi-faceted plan consisting of new policies to address Ontario's rising housing costs to provide affordable housing to people of Ontario would also help create jobs for people and help them in their everyday lives.

The province will also expand rent control, which now only applies to units built before November 1991, after tenants in newer units complained of dramatic spikes in rent.

But Geordie Dent, a representative of the Federation of Metro Tenants Associations, says it's a myth that rent control limits the construction of new rental-specific homes.

Ontario's average vacancy rate dropped to 2.1 per cent in the fall of 2016, from 2.4 per cent in 2015, the lowest vacancy rate since October 2003; in Toronto, the vacancy rate was 1.3 per cent, the lowest in 12 years.

Also, there will be an expansion of rent controls to all buildings.

Also to its credit, it concedes some basics of supply and demand: If you increase the housing supply, prices will go down.

The Greater Toronto Area may be the focus of federal Finance Minister Bill Morneau's meeting with his provincial counterpart and Mayor John Tory on Tuesday, but a city more than 4,000 kilometres away could be top of mind, according to a leading financial expert.

"But we do believe there is a need for interventions right now in order to calm what's going on", she said.

One is the B.C. provincial election, where voters will weigh in on how Christy Clark's Liberal government has handled the housing file.

Wynne made the much-anticipated announcement on the housing market and new rent controls with condos in one of Toronto's trendiest neighbourhoods as her backdrop.

Neither of Ontario's opposition parties objected to any of the government's proposed measures.

Benjamin Tal, deputy chief economist with CIBC, said the measures are likely to cool the market over the next six months as many buyers will move to the sidelines to assess the fallout stemming from the changes. These new measures include developing a standard lease and tightening regulations around landlords evicting tenants for their own use.

- A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.

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.

A rebate of development cost charges to encourage building of more rental housing.

Ontario Finance Minister Charles Sousa has spoken frequently in recent weeks about going after speculators, who buy houses in the hope of turning a profit rather than to live in.

- An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.

Federal and Ontario finance ministers say that while they are concerned about diminishing housing affordability in Toronto, they will not introduce measures for homebuyers that could impact house prices in the city by boosting demand.

Other reports by iNewsToday