Ontario’s Liberal government will slap a 15 per cent tax on home purchases by non-resident foreigners and will expand the province’s existing rent control system to cover all tenants, CBC News has learned.
The moves come after the price of the average home in the Greater Toronto Area jumped 33 per cent in a year, triggering warnings of a real estate bubble, as well as after reporting by CBC Toronto revealed landlords slapping massive rent increases on tenants.
CBC News has obtained information on several of the measures in the provincial government’s strategy to rein in housing costs. The information comes from sources with knowledge of the announcement to be made Thursday morning. In addition to the foreign buyers tax and expanded rent control, the measures also include:
- A rebate of development cost charges to encourage building of more rental housing.
- A standardized lease document for all tenants.
- A ban on flipping of pre-construction units by speculators.
- A review of the rules governing the conduct of real estate agents.
The full details will be unveiled at 9 a.m. today by Premier Kathleen Wynne, in the fast-growing Toronto neighbourhood of Liberty Village, along with Finance Minister Charles Sousa and Housing Minister Chris Ballard.
Non-resident speculation tax
Sources with knowledge of the announcement tell CBC News that Ontario will impose a 15 per cent tax on residential real estate purchases by anyone who is not a citizen or permanent resident, if they are not living in the province. Called the “Non-Resident Speculation Tax,” it is similar to the tax imposed in Metro Vancouver last year, but with a rebate for homebuyers who become resident within a limited time period after the purchase.
The tax will apply to purchases in the Greater Golden Horseshoe, an expanse of land that includes the Greater Toronto and Hamilton Area, as well as the surrounding region stretching from Peterborough through Barrie, Waterloo and the Niagara Peninsula to the U.S. border.
Broadening rent control
Sources with knowledge of the announcement tell CBC News the government will bring all tenants under the province’s existing rent control system, ending the exemption that currently allows unlimited rent increases in units built after 1991. The change will mean annual rent increases for all tenants who stay in their rental housing will be limited to Ontario’s inflation-based guideline (which this year is set at 1.5 per cent), unless the landlord gets approval from the Landlord and Tenant Board.
In addition, the sources say, the province will introduce reforms making it harder for landlords to get approval for a…