Ontario, Canada brings in foreign housing tax to cool market

As of Monday, the province will require homebuyers to provide information about who they are, and how they intend to use the property, according to a new post on a provincial government webpage.

The request comes after what some councillors see as the success of the same foreign buyers tax imposed last fall in Vancouver and as Ontario Premier Kathleen Wynne announced a 15 per cent foreign buyers levy in the Toronto area.

What Sousa didn't say is that the Liberals have more than doubled Ontario's debt to more than $300 billion since coming to power in 2003, which has made Ontario the most indebted sub-sovereign (non-national) borrower in the world. A housing market crash would be bad for everyone - including the government, by the way, which collects a land-transfer tax on real estate transactions that has lately been bringing in more than $2 billion annually. House prices in Toronto have been on a tear in recent months, rising almost 30% in March from a year earlier.

The cost of a detached home in Toronto roared to a new record high of nearly $1.6 million in March, a 33 per cent climb over prices previous year, according to the Toronto Real Estate Board (TREB). Wynne said there is a problem when the market jumps 33 per cent in a year. "And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act".

The government will reportedly bring all tenants under the province's existing rent control system, ending the exemption that now allows unlimited rent increases in units built after 1991. Those have averaged two per cent in the last 10 years and this year it is 1.5 per cent.

Tenants groups welcomed the move.

Further, the approach to lowering Toronto's housing prices attempts to solve numerous issues without considering whether government measures, such as restrictive zoning or current rent controls, have contributed to these woes in the first place.

While no immediate action is expected from the gathering of Sousa and Toronto Mayor John Tory, the first concerted effort to Finance Minister Bill Morneau, Ontario Finance Minister Charles rein in Toronto house prices, all three are pushing for policy options to cool prices without crashing the market.

"There is a need for interventions right now in order to calm what's going on", she said.

RBC Capital Markets past year identified a number of major issues driving up housing prices.

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

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

"The housing boom continues courtesy of low interest rates from the Bank of Canada", said Marc Pinsonneault at National Bank of Canada in a brief to clients following the release. Better known as a foreign buyer tax, this fee will be implemented on any non-Canadian citizens, non-permanent residents and non-Canadian corporations buying residential properties containing between one and six units in the Greater Golden Horseshoe region (GGH).

The new plan extends rent control to all private rental units in the province.

A standardized lease document for all tenants.

With average selling prices in Toronto, Canada, up by a third, all eyes are on the government to see if they are likely to impose market cooling measures.

This is the natural outcome of government policies that encourage immigration to Toronto, where there is a finite amount of land available for residential housing development, hemmed in by the Greenbelt to the north and Lake Ontario to the south. The Fair Housing Plan will also include a new Housing Supply Team of dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.

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