CP says Ontario will levy 15% tax on foreign home buyers

Foreign buyers tax driving business to the island

Foreign buyers tax driving business to the island

It applies to property in the Greater Golden Horseshoe area - one of North America's fastest growing regions, comprised of the Greater Toronto Area and surrounding municipalities. Once legislation passes, the tax would be effective retroactively to April 21.

The tax would not target immigrants and a rebate would be available to people who subsequently get citizenship or permanent resident status, as well as foreign nationals working in Ontario and global students.

"The non-resident speculation tax has nothing to do with new Canadians and people who want to make Ontario their home".

"You're looking to raise your family and grow in the community and you're being outbid and outpriced by people that are just using it as a commodity", said Fred Altbaum, 34, a marketing professional struggling to buy a home with his wife and daughter.

So far, data to confirm the undue influence of foreign capital in Toronto, and Vancouver's, real estate markets has been sparse.

While ongoing collaboration with the federal government and City of Toronto is key to improving housing affordability for renters and those looking to purchase a home over the long term, our government is also aware that a response is needed now to address recent dramatic increases in rents and home prices. Only people who have no connection to the local labour market would pay.

Sales in Vancouver cooled past year in the wake of a tax on foreign buyers.

"Today's announcement by the Wynne government will put thousands of units, and millions of dollars in provincial revenues at risk", said Jim Murphy, president and CEO of the Federation of Rental-housing Providers of Ontario, in a statement. "In some ways, we have to realise this is a good problem to have ..."

According to the Fair Housing Plan, expanding rent control to all private rental units in Ontario-including those built after 1991-will ensure increases in rental costs can only rise at the rate posted in the annual provincial rent increase guideline. To highlight its concerns, the association recently conducted a survey of its membership detailing the extent of damage the change could have on the province's new rental supply. This year it is 1.5 per cent.

Tenants groups welcomed the move.

The province is also considering to bring in a standardized lease, similar to that exists in Quebec, to stop landlords from putting illegal clauses in their contracts with tenants. Rents in Toronto haven't kept pace with property values and controls would limit new investment and hurt supply, he said.

A rebate of development cost charges to encourage building of more rental housing.

"When Minister Charles Sousa and Premier Kathleen Wynne talk about the causes of housing unaffordability, they need to look in the mirror", said CTF Ontario Director, Christine Van Geyn.

"We have all heard the stories of rent gouging going on in today's market".

Kenjeev expects the trilateral meeting on Tuesday will focus mainly on making sure any actions to cool Toronto's housing market will be coordinated across all levels of government.

Home prices in the Toronto area climbed 6.2 percent last month, the biggest one-month gain on record, according to a benchmark price index by the Canadian Real Estate Association, and are up nearly 30 percent over the past 12 months.

On Thursday, Sousa boasted to The Empire Club in Toronto that his fifth budget on April 27 will demonstrate that, "Ontario is the leanest government with the lowest per-capita spending of any province".

Neither of Ontario's opposition parties objected to any of the government's proposed measures.

"The issue is that builders will tell you that if you impose rent control that is only as high as inflation, that is not enough for them to start building". Progressive Conservative Housing Critic Ernie Hardeman said the measures are moving "in the right direction".

Analysts say Ontario had no choice but to act aggressively, given the frothy state of the Toronto market.

The province pledges to use surplus provincial land for additional affordable housing.

New powers for Toronto and other municipalities to introduce a tax on vacant homes to encourage owners to sell or rent unoccupied units.