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Ontario to tax foreign buyers, expand rent control to cool housing market

21 April 2017

That means the progressive property surtax would apply to people who own an expensive home and speculators who own multiple expensive homes, but pay little-to-no income tax in Ontario, whether that's because they're foreign nationals or have otherwise avoided or evaded taxes, he said.

In the past year, residential real estate prices in the Toronto area jumped 33.2 percent to Can$916,567 (S$950,270), pushing home ownership beyond the reach of most Canadians. "They should be able to rent or enter the real estate market without making great sacrifices or taking on a huge amount of risk", Ms. Wynne's office said in a statement.

"But we do believe there is a need for interventions right now in order to calm what's going on", she said.

It will hit all residential transactions in the Greater Golden Horseshoe - including the Greater Toronto Area, Niagara, Kitchener-Waterloo, Barrie, Orillia, and Peterborough. Once legislation passes, the tax would be retroactively applied to 21 April.

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A move to expand rent control to all private rental units in Ontario, including those built after 1991, which are now excluded.

In addition to imposing levies on empty homes, options to cool the market could include taxing foreign buyers, steps to boost supply, and rent control measures. But a recent report from realtor Royal LePage suggests the Vancouver market may be starting to bounce back.

"But if Vancouver is any guide, we might see a short period in which domestic buyers will sit on the sidelines while assessing the impact of the tax".

"That's exactly what we've seen in Vancouver", said Tal.

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Skyrocketing demand and rising cost of housing is the "unwanted consequence" of a growing economy, but the province's new measures will make the process of finding a place to live a little easier, a little less frantic and a lot fairer, Wynne said.

A rapid acceleration in home prices in Toronto had prompted some economists to voice fears that the real estate market in Canada's most populous city is in a bubble and raised concerns about the ability of first-time buyers to afford a home. Rents in Toronto haven't kept pace with property values and controls would limit new investment and hurt supply, he said. She said that poses a challenge for locals bidding for houses that are selling for hundreds of thousands over the asking price.

"Last weekend a house sold for 1 million over asking on a 2 million-dollar home".

"Probably one of the most important things we can do is stay in touch with each other on something that is as volatile and complicated as this issue", Tory said in an interview Monday.

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The Toronto Star reported earlier, without saying where it got the information, that Sousa will announce some 10 measures ranging from rent controls to a new tax on speculators.