Finance

Canada puts housing speculators on notice as Toronto prices soar

Canada puts housing speculators on notice as Toronto prices soar

The new tax would be effective as of April 21, 2017.

Among more than a dozen measures in the government's housing affordability plan will be some kind of clampdown on domestic housing speculators - though they will not face a 15 per cent tax.

She said the tax is aimed at "people looking only for a quick profit, not a place to call home".

Separately, Prem Watsa, head of Canadian investment firm Fairfax Financial Holdings Ltd., said on Thursday the Toronto real estate market is in a bubble that will end with pain for banks that financed the growth.

Vancouver's empty homes tax is one per cent of the value of the property and it applies to homes that aren't being used as a principal residence or aren't rented out for at least six months of the year.

Premier Kathleen Wynne said the new tax would not target immigrants, and a rebate would be available to foreigners who work in Ontario, those who subsequently get citizenship or permanent resident status and global students. But a recent report from realtor Royal LePage suggests the Vancouver market may be starting to bounce back.

Excluding Greater Vancouver and Greater Toronto, the average price was $389,726.

The average price of detached houses in the Greater Toronto Area rose to $1.21 million last month, up 33.4 per cent from a year ago, but Wynne says the issue extends throughout the Golden Horseshoe area.

"The issue we're facing on housing affordability affects nearly everyone - those with lower incomes being priced out of the city and forced to commute hours every day to work, middle income earners struggling to afford rent and young couples looking to start a family and looking to acquire their first home and feeling an increasing sense of impossibility", he said.

"What we're aiming to do is to bring in some initiatives that will help people in that whole continuum of housing right from rental through to purchasing a home without having unintended consequences, " she said in Ottawa.

Fire marshals begin fatal blaze investigation
He drove by the fire and called 911 after seeing flames shooting from the first and second floor of the wood-frame home. Neighbor Dorothy Murray said she baby-sat for the little victim, 2, who was caught on footage being carried out.

- Expanded rent control that will apply to all private rental units in Ontario, including those built after 1991, which are now excluded.

Tenants groups welcomed the move.

The plan has a number of initiatives aimed at the rental market with the biggest being the province's decision to expand rent control to all units built after 1991.

Furthermore, Hoffer voiced concerns that the mandatory lease proposals will require most operators to revise their administrative processes and current leasing documents, which for many will be a costly exercise.

And there's also the issue of rentals of condos, which have been become an increasingly important part of Toronto's housing supply.

In addition, it would empower Toronto and potentially other interested municipalities to introduce a tax on vacant homes to encourage owners to sell or rent unoccupied units.

Souza met with his federal counterpart Bill Morneau and Toronto Mayor John Tory on Tuesday to discuss potential measures. "Frankly, it's a free market and market forces will prevail ultimately as we proceed forward", Sousa said.

With new legislation, the Wynne government also plans to limit rent increases to 2.5 per cent per year for all units in the province.

Home prices in the Toronto area climbed 6.2 percent last month, the biggest one-month gain on record, according to a benchmark price index by the Canadian Real Estate Association, and are up nearly 30 percent over the past 12 months.

"Today's announcement by the Wynne government will put thousands of units, and millions of dollars in provincial revenues at risk", said Jim Murphy, president and CEO of the Federation of Rental-housing Providers of Ontario, in a statement.


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