Deconstructed

On Thursday, the Ontario government introduced 16 measures intended to cool the housing market in the Greater Toronto Area. Here’s a breakdown of all 16 items and the impact housing market experts believe they will or will not have. 5. Allowing City of Toronto, and potentially other interested municipalities, to introduce a vacant homes property tax to encourage owners to sell unoccupied units or rent them

While Vancouver already has a vacancy tax that will go into effect this year, it is still unclear how such a levy will function in practice.

“There are very few examples of such taxes,” said Beata Caranci, chief economist with Toronto-Dominion Bank, noting that Vancouver and Camden, U.K. are the only two jurisdictions to implement them. “Camden’s experience with an additional 50 per cent property tax in 2013 has led to approximately one-third of vacant properties being brought to the rental market,” she said. “However, the tracking of vacant properties can be difficult and often subjective.” 6. Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties 11. Reviewing the rules for real estate agents to ensure consumers are fairly represented in transactions

The province wants to get tough on reports of phantom bids, whereby fake offers are used as a wedge to make people bid more. It also looking at double ending, whereby the same agent can be representing the buyer and the seller.

Phil Soper, chief executive of Royal LePage Real Estate Services Ltd., said doubling ending is legal in most provinces with some restrictions in British Columbia, but his own firm has instituted rules against it.

“We require in multiple offer situations that if an agent has their own buyer client (in addition to representing the seller), that a manager be involved to represent that client buyer’s offer,” said Soper. “The biggest issue in our industry is transparency.” 12. Establishing a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market

What if none of the changes actually work? This group may be busy coming up with new plans. It will be made up of economists, academics, developers, community groups and the real estate sector. 13. Educating consumers on their rights, particularly when it comes to the issue of one real estate professional representing more than one party in a real estate transaction

In most cases an agent acting on both sides of the deal is legally working for the seller. Some agents maintain this isn’t an issue when there is just one buyer — it comes down to agreeing on a price. In a multiple offer auction, the situation becomes more complex because consumers are caught in bidding wars. 14. Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario

Flippers beware. The province could provide the CRA with information to follow up on capital gains taxes that have not been paid.

Through the changes to the collection of the land transfer tax, which go into effect April 24, Ontario will require buyers to declare whether a unit is being used as principal residence and therefore eligible for a tax exemption.

Ontario is also demanding to know if you are leasing and the CRA could be armed with information about your rental income. 15. Making elevators in Ontario buildings more reliable by establishing timelines for elevator repair in consultation with the sector

It’s a constant complaint of some tenants in downtown condominiums that they are always waiting for elevators.

Upgrading the number of elevators after the fact would prove to be very difficult if not impossible, but hard rules on repair time lines would at least provide some relief.