Blog: Ontario Introduces a Non-Resident Speculation TaxApril 20th, 2017
This morning, Ontario Premier, Kathleen Wynne unveiled 16 measures to make housing more affordable in the Toronto area. The announcement comes after two consecutive years of double-digit gains, with the average house prices in the region reaching $916,567 in March 2017. We have highlighted a few of these measures below.
Included in these measures is a 15 per cent Non-Resident Speculation Tax (NRST) on non-Canadian citizens, non-permanent residents and non-Canadian corporations buying residential properties containing one to six units in the Greater Golden Horseshoe (GGH). The GGH covers the area from Simcoe County down to Niagara Region and Haldimand County on Lake Erie, and from the Waterloo Region to Peterborough and Northumberland Counties. The tax is effective as of April 21, 2017 and applies to the value of consideration in respect of the transfer (including a beneficial transfer only) of a residential property. In addition, Ontario is partnering with the Canada Revenue Agency to strengthen reporting requirements and make sure taxes are paid on real-estate purchases and sales.
Further, Ontario is targeting and tackling the real-estate practices of “Property Scalpers” to ensure that consumers are fairly represented. The province intends to also introduce legislation which would allow Toronto “and potentially other municipalities” to introduce vacancy taxes.
With respect to the rental market, Ontario plans to extend rent control to all private rental units in Ontario, including those built after 1991, which are currently excluded.
As there are various uncertainties in the draft legislation, specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Contact your Crowe Soberman advisor for more details.