Housing package will take aim at speculators
Wynne expected to add 15 per cent tax on foreign real estate speculators
Ontario’s upcoming package of housing measures set to be announced Thursday will include a 15 per cent “non-resident speculation” tax on foreign investors, according to reports from The Toronto Star.
Premier Kathleen Wynne’s government will take aim at speculators, expedite more supply, tackle rental affordability and look at realtor practices in at attempt to cool the hot southern Ontario housing market.
The government has been facing increasing pressure to cool the market in the Greater Toronto Area, where the price of detached houses rose to $1.21 million last month, up 33.4 per cent from a year ago.
The intention of the package is to “give everyone some breathing space” in a frenzied market, Premier Kathleen Wynne said Wednesday.
“What we’re aiming to do is to bring in some initiatives that will help people in that whole continuum of housing right from rental through to purchasing a home without having unintended consequences,” she said in Ottawa.
“If we look at what economists are saying, look at what folks who are trying to buy a home are saying, it’s really gotten to the point where it is out of control and we need to do something.”
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.
“We want to make sure that whoever is speculating is in fact paying their fair share,” he said Wednesday.
“That means those who are trying to take advantage of capital gains exemptions, shouldn’t be.
“They should be paying income on those issues.”
Sousa added, “I’ll have more to say on that in the coming days.”
Sousa has been considering a tax on nonresident speculators, but he has declined to clarify what that could look like.
“As you know, there are a number of speculation activities within our market, by domestic and nonresident Canadians, so we’re looking at what we should be able to do for the benefit of Ontario and our economy,” he said.
Sousa has said families are angry they can’t win bidding wars, and suggested such activities will be dealt with in the housing package.
“The realtors themselves have asked for a little more transparency and determination as to how operations are,” he said.
“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.”
The package will also deal with how to expedite the availability of housing supply, Sousa said, as the government has heard complaints from builders that the process is too cumbersome.
Sousa discussed vacancy rates that are constraining supply at a meeting this week with the federal finance minister and Toronto Mayor John Tory, who has been talking about a vacant homes tax.
The three agreed at their meeting that in the short term, none of the levels of government will bring in new measures for homebuyers that would further boost demand, suggesting it’s unlikely first-time homebuyers will see any incentives in the near future.
Under the new rules, which took effect on Jan. 1, first-time homebuyers don’t pay any land transfer tax on the first $368,000 of a purchase price.