Ontario wants to tax foreign buyers, vacant homes

The Ontario government has launched its response to the red-hot Toronto housing market which has spread to other parts of the province.

The Fair Housing Plan aims to tackle supply and affordability issues with 16 key proposals including expanded rent controls and greater collection of data.

The province is proposing a 15 per cent tax on residential properties in the Greater Golden-Horseshoe by by individuals who are not citizens or permanent residents of Canada or by foreign corporations.

The legislation, if passed, would apply from today (April 21, 2017) to transfers of land that contain at least one and not more than six single family residences.

Refugees and nominees under the Ontario Immigrant Nominee Program would be exempt and rebates would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students.

There could also be a tax on vacant homes in Toronto. The proposal is for legislation which would give the City the power to implement the taxation of homes left empty. Other municipalities may also be given the power.

Supply will also be tackled by allowing affordable housing to be built on some of the province’s surplus land; and other incentives to get developers building affordable and rental units.

Some organizations have been quick to react to the Fair Housing Plan.

"As an insurer of first-time homebuyers, we have seen a growing divergence between what first-time buyers can afford and average market prices,” said Stuart Levings, President and CEO of Genworth Canada. “These measures will help responsible families and individuals achieve their dreams of homeownership while protecting the equity that existing GGH homeowners have invested in their properties.”

Meanwhile, the Conference Board of Canada said that it was time for Ontario to act.

“More sustainable and moderate price growth is in the interests of buyers, sellers, the financial system and the economy,” said Craig Alexander, Senior Vice-President and Chief Economist.

MBN

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