Just this April, the Ontario government released a 16-point plan designed to control the housing market in Toronto. This article will show how these changes could affect the housing market, based on expert opinions of real estate professionals such as mortgage brokers.
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1. A 15-percent Non-Resident Speculation Tax (NSRT) on home purchases made by non-citizens, non-permanent residents, and foreign corporations is established to control rapid price increases on properties. This can potentially work, as there are a lot of potential foreign buyers living in Toronto.
2. Rent control was expanded to include private rental units built after 1991. This is not received well by builders, with some even cancelling rental projects in their pipeline because of this law.
3. A standard lease for all tenants in the province of Ontario was established. This provides protection for tenants while also giving better predictability for landlords. Own-use evictions are also cracked down.
4. Ontario is now looking at its own surplus land to see which properties can be used for development purposes. While this does not address the land supply issues in Toronto, it at least opens up to opportunities that maximize available land.
5. Ontario has just allowed Toronto and other municipalities to introduce vacant homes property tax to force owners of empty homes to either rent them out or sell them. On paper, this plan may work, but it may be tricky to make this work.
6. Property taxes for apartment buildings are made similar to taxes of other residential properties. This might be designed to make properties more rental-friendly, but many builders may not risk turning their properties into rentals.
7. A $125 million program has been announced to enhance construction of new rental buildings thru developmental charge rebates. However, many builders think that the budget for this program is too small relative to investments made on rental construction projects.
8. The state has empowered municipalities to create taxes such as the vacant land tax. These taxes may push developers to accelerate building plans to accelerate land development.
9. A housing supply team with dedicated provincial employees is established to identify barriers to housing development projects. However, a revamp on the Ontario Municipal Board is seen as a better proposal that must be made.
10. Acquiring a better understanding of practices designed to avoid taxes and excessive speculation has been made a priority by Ontario. This is seen as a move for the state to get better compensation under the land transfer tax.
11. A review of the real estate agent rules is made to ensure fair representation of consumers in real estate transactions. For example, a crackdown on fake bids and offers is now being initiated.
12. A housing advisory group will meet 4 times a year to provide the government information on how the housing market can potentially be improved. Multiple sectors are expected to be involved here.
13. An emphasis on consumer education is to be made to resolve issues of real estate professionals representing more than one party in the same transaction.
14. A partnership with the Canada revenue agency (CRA) is made in the hope of building more comprehensive reporting requirements to ensure correct taxes are paid in the state. This can give the CRA better info on identifying unpaid taxes.
15. Establishing timelines on elevator repair is designed to make Ontario buildings more reliable. This is expected to be done in coordination with all involved sectors.
16. An updated growth plan will be established thru the establishment of a better province-municipality working relationship. However, experts are worried that such plans can stall a number of housing projects like high-rise buildings.