Ontario mulls non-resident speculation tax

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While Vancouver's once-boiling market has cooled since a 15 percent foreign buyers tax was imposed in August, Toronto has continued to boil and the heat has spilled over into neighboring cities in southern Ontario.

The new measure applies to non-Canadian citizens, non-permanent residents, and corporations buying residential properties containing up to six units.

The province also introduced legislation that allows Toronto (potentially other municipalities) to introduce a vacant home tax.

The intention of the much anticipated housing measures package is to "give everyone some breathing space" in a frenzied market, Premier Wynne said Wednesday.

The government will reportedly bring all tenants under the province's existing rent control system, ending the exemption that now allows unlimited rent increases in units built after 1991.

Meanwhile, the cost of a detached home in Toronto roared to a new record high of nearly $1.6 million in March, a 33 per cent climb over prices past year, according to the Toronto Real Estate Board (TREB).

A disaster in Toronto could discourage people elsewhere from entering the market, he said, by making them reluctant to enter bidding wars, for example. By exempting students from the NRST the province is intentionally keeping a door open to allow worldwide speculators to buy up single family homes in their children's names - at the expense of tax paying residents who can't compete.

Dent called the changes "important and major" but said more supply in the form of a large-scale building program is needed.

What else do you need to know about "Ontario's Fair Housing Plan?".

"I'm very mindful of any unintended consequences from the measures that we take", he said.

Notably, the issue of foreign buyers has been particularly controversial, with critics blaming them for speculation within the housing market but without hard data to support their contentions.

A key plank in that would be the 15 per cent surcharge on offshore speculators, who are estimated to make up just 5 per cent of the current market. A similar measure introduced in Vancouver a year ago had an nearly immediate impact on that city's red-hot housing market, significantly cooling demand by speculative buyers from overseas. The act introduced policies to increase intensification and density in new housing development.

We will be sharing relevant data more regularly between governments to enhance understanding of the Ontario housing market and to help inform analysis of current and future measures created to provide market stability. The B.C. practice involved existing homes, whereas Ontario's measures specifically target pre-construction homes that are sold on assignment before they're finished.

Rules for real estate agents will also be reviewed, in particular practices such as double ending, where the agent represents both the buyer and the seller.

The three politicians made the comments after a special meeting to discuss the housing situation.

Speaking before the provincial announcements, leading agency, Royal LePage tells OPP.Today that whatever happens, all indications are that home prices will continue to rise this year.

But more important than the actual speculation tax is the fact that the provincial government will begin to collect citizenship information for every person buying a residential property in the Greater Golden Horseshoe.

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