Hi, welcome to another segment of A + Trends. Today topic Ontario’s foreign buyers tax.
Last year Ontario Finance Minister Charles Sousa said that Ontario would not follow the lead of British Columbia, which imposed a 15-per-cent tax on foreign nationals buying real estate in the Vancouver area. Instead, the provincial Liberal government doubled the rebate on its land transfer tax for first-time home buyers to $4,000 and raised the same tax on homes that sell for more than $2 million. But this year Finance Minister Charles Sousa says he is considering foreign buyers’ tax as one possible option to cool the housing market. The average price of a detached home in Toronto is now more than $1.5 million and the average price of homes sold in the Greater Toronto Area last month rose 27.7 percent over last year. Last year CMHC boosted the risk rating in its overall assessment of Canada’s residential market to “strong” from “moderate” when it issues their report on Oct. 26. Ontario Finance Minister said he is considering a number of options for the next step, and “a foreign tax is just one.
Sousa said In Ontario, the housing market has been heating up not just in Toronto, but across the whole Golden Horseshoe which encompasses the western end of Lake Ontario, and regions south to Lake Erie and north to Georgian Bay.
It’s not clear yet if foreign buyers are driving up demand or not, he said, noting Ontario has also been receiving a greater share of interprovincial migrants lately. In the third quarter of 2016, about 11,600 people moved to Ontario from other provinces, reversing a trend in recent years of more people leaving Ontario for other provinces, according to Ministry of Finance data.
The Ontario Real Estate Association has come out against a foreign buyers’ tax, saying the overwhelming majority of foreign home buyers are immigrants or permanent residents looking for a home, not speculators.
“The main culprit behind rapidly rising house prices is the GTA’s unbalanced market, housing supply cannot meet demand and not foreign buyers,” CEO Tim Hudak said Thursday in a statement. “Home affordability needs to be addressed before millennials are completely priced out of the market.”
“Before we pin a tax on foreigners, we need to address the elephant in the room and that’s the lack of housing supply,” Hudak said.
In City of Toronto the average selling price for residential properties reach $859,186 in February, an increase of 19.2 percent, in the GTA it hit $875,983.
Looking to buy, sell rent or invest? Were here to help 24/7.
Please enter your contact details and a short message about the property your inquiring about.