It’s no secret that it costs an arm, a leg, and a bit of your soul to buy a house in Halton. Housing prices are still soaring, and now, the province has passed legislation that aims to cool down the housing market.
Though foreign buyers activity remains low in Ontario, the province has passed legislation that taxes foreign buyers.
We recently reported that the province had developed the Budget Measures Act (Housing Price Stability and Ontario Seniors’ Public Transit Tax Credit), 2017 in an attempt to increase housing affordability for people in the Greater Golden Horseshoe and make public transit more affordable for seniors.
The legislation was passed last week.
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First, starting July 1, 2017, the refundable Seniors’ Public Transit Tax Credit will be equal to 15 percent of a senior’s eligible public transit costs for anyone aged 65 or older.
The credit applies for the 2017 and subsequent tax years. However, for the 2017 taxation year only costs for the use of public transit services between July 1 and December 31 will be eligible for the credit.
More pressingly, there will be a 15 percent Non-Resident Speculation Tax (NRST) on non-Canadian citizens, non-permanent residents, non-Canadian corporations and taxable trustees buying residential properties in the Greater Golden Horseshoe.
The NRST applies to residential properties purchased or acquired on or after April 21, 2017 in the Greater Golden Horseshoe.
There are exemptions intended only for refugees, nominees under the Ontario Immigrant Nominee Program, or if the purchaser jointly acquires the designated land with a spouse who is a Canadian citizen, permanent resident of Canada, refugee or nominee.
According to the province, the NRST will help address unsustainable demand in the region, while ensuring Ontario continues to be a place that welcomes all new residents.
“Our government is working to make life more affordable for everyone in Ontario,” said Minister of Finance Charles Sousa.
Though there was no data to show how widespread foreign buyership, buying and selling houses in a short period of time, or a combination of the two was in Ontario when Sousa initially mentioned the tax months ago, the Toronto Real Estate Board (TREB) announced that foreign buyers activity actually remains low in Ontario.
Though the province hopes the NRST will address housing affordability, it remains to be seen whether housing prices will actually stabilize because of the tax.
The NRST is one of 16 measures on Ontario’s Fair Housing Plan.