Ontario Introduces Measures To Rebalance Provincial Housing Market
Wednesday Aug 02nd, 2017
April 21,2017 the Government of Ontario announced a slew of measures, referred to as the Fair Housing Plan, intended to address some of the challenges facing the rapidly overheating housing market. The comprehensive set of actions is meant to take a multifaceted approach by helping cool demand, address shortages of supply, and promote affordability in the provincial housing market. Sixteen initiatives can be categorized into three broad buckets:
• A 15% non-resident speculation tax (NRST) in the Greater Golden Horseshoe on residences between one and six units. The NRST would be levied on non-citizens, non-permanent residents of Canada, and foreign corporations, but would exclude refugees, and nominees under the Ontario Immigrant Nominee Program. There were a number of exclusions, in which tax rebates would be available to those who subsequently receive citizenship or resident status. In addition, exclusions were also made available for international students and foreign nationals who can demonstrate residency for a period of time from point-of-purchase of a home.
• Prevention of ‘paper flipping,’ or reselling properties pre-construction.
• Allow municipalities to levy a property tax on vacant homes
• Provide flexibility for municipalities to impose higher taxes on vacant land
• Lower property-taxes for new purpose-built apartment buildings
• Leverage provincial assets to help build housing stock
• Introduce a $125 million program over five years to encourage purpose-built apartments
Expanding rent control and enhancing standards:
• Expanding rent control to all renters and including purpose-built properties built after 1991
• Strengthening rental standards and rules that govern the sales of properties, as well as several other measures designed to enhance efficiency and clarity in the housing market