Ontario, Canada brings in foreign housing tax to cool market

"Strengthening Ontario's rental market is an important way our Fair Housing Plan will help make everyday life more predictable, affordable and fair for Ontarians so they can continue to put down roots in the communities they love". "I think they're already having an effect".

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.

Those who pay the tax but later become Canadian citizens or permanent residents, or who work or study in the area, will be eligible for a rebate.

Josh Gordon, an assistant professor at Simon Fraser University who studies the housing markets in Ontario and British Columbia, said one way to tax "non-resident speculation" would be to levy a foreign buyers tax but refund or offset it according to income tax paid in the province. In its latest report, the Toronto Real Estate Board states the average selling price for a home in March was just under $900,000, with detached homes selling for an average of more than $1.56 million.

It will also allow municipalities to impose a new tax on vacant homes and introduce rent controls for apartment buildings constructed after 1991.

Currently, existing legislation is having the industry's desired impact on the market, with a recent report from Urbanation noting a 50 per cent year-over-year increase in planned rental projects in 2016, and a further 27,000 new goal built rental units in the planning stages.

Every day brings a new outrageous story out of the Greater Toronto Area's skyrocketing housing market.

The latest sales data came ahead of a meeting between Mayor John Tory and the federal and Ontario finance ministers to discuss soaring home prices in the Greater Toronto Area, which have leapt by more than 30 per cent in the previous year.

"The move forward with an approach to dealing with potential speculators we hope will have an impact on reducing the speculative nature of what's going on in the market", he said.

Be careful: Toronto's record-high sales numbers have renewed calls from analysts to think twice about entering the real-estate market.

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That's why they're talking about imposing everything from a foreign buyers' tax, to a speculators' tax, to a tax on vacant real estate to "solve" Toronto's housing crisis.

The Liberals have also said that the government is developing a "substantive" rent control reform that could see rent increase caps applied to all residential buildings or units.

Housing is essential for families across Ontario, yet too many people are being affected by the growing pressures of trying to buy a home or afford their rent. Jim Murphy, president and CEO of the Federation of Rental Housing Providers, said it will have a negative impact on 28,000 new purpose-built rentals in the pipeline in the Toronto area. The company cut ties with 45 brokers in 2015 after finding falsified borrower income information, the same flaw that sunk many subprime lenders in the USA during the housing crisis.

A review of the rules governing the conduct of real estate agents.

The province has extended rent controls to all rental apartments including those built after 1991.

All indicators right now point to the Toronto market experiencing significant growth over the remainder of the year, says Mr Zigelstein.

But several economists say that rent control isn't the solution to Ontario's housing problem.

- 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.

- More flexibility for municipalities when it comes to using property tax tools to encourage development.

- Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.

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