Yesterday, Premier Kathleen Wynne finally announced changes to real estate in Ontario in an attempt to increase supply and address affordability. There will likely be confusion about the effects of the changes, but ultimately the fundamentals of a healthy market have not changed.There are 16 proposed measures, here are the top 5 highlights:
First, a 15% Non Resident Speculation Tax (NRST) in the Greater Golden Horseshoe will be implemented, effective immedia
tely. Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST. The bulletin issued by the Ministry of Finance can be found at, please read in detail: http://www.fin.gov.on. ca/en/bulletins/nrst/nrst.html
Second, rent control will now extend to properties built after 1991, also effective immediately.
Fourth, surplus land will be used to build affordable housing.
Third, municipalities will be given the option to create a vacant home tax should they choose.
Fifth, the province will require municipalities to lower taxes on multi unit rental dwellings.
Also, announced the province will collect additional information through the land transfer tax system to help it better understand trends in the real estate market. This collection will take place by the lawyer at closing. We believe this is a positive measure as it will assist with decision making regarding the market in the future.
Effective , the purchaser will have to declare:•Whether the home is intended to be occupied by the person who purchases or acquires the land, or their family member(s), as their principal residence;•The type of dwelling (detached, semi‑detached, condominiums, cottages, etc.);•Whether the property, in part or in whole, is intended to be leased out;•The residency, citizenship and permanent resident status, if the person who purchases or acquires the land is an individual;•Information about incorporation, ownership and control, if the purchasers are corporations;•Information about beneficial owners, if the person who purchases or acquires the land is acting as a trustee, nominee or in a similar capacity.
On another note, there is also talk the government will come up with measures to make the bidding war process more transparent. Nothing has been announced at this stage.
There has been no change to the fundamentals that drive healthy markets, low cost of borrowing, solid economic conditions and population growth. We must remember that home ownership should always be viewed in the long term, short term speculation is something completely different.
We will no doubt keep our eye on details as they develop.