March Madness has come and passed but there's a new 'Sweet Sixteen' to get excited about. Thursday morning, Ontario premier Kathleen Wynne spoke in Toronto's ever-expanding Liberty Village neighbourhood and unveiled 16 new measures aimed at cooling the dangerously hot Toronto housing and rental markets.
On the housing front, most of the changes are aimed at de-incentivizing speculation—foreign or otherwise—and eliminating home vacancies. Wynne's government introduced what will be called the Non-Resident Speculation Tax, a 15 per cent levy on foreign buyers who don't live in Canada. That move is right out of British Columbia's playbook. And it's proven to work. After BC introduced a similar tax last summer, the share of foreign buyers who were involved in residential transactions in Vancouver dropped massively.
The Liberals also opened the door for vacancy taxes in Toronto "and potentially other municipalities" by introducing the legislation required to eventually put such policy into motion. A vacancy tax would amount to significantly less than a Non-Resident Speculation Tax (Vancouver's is only one per cent at present), but it would still encourage homeowners to rent if they aren't living in their property.
Another target of these new reforms is property scalpers, who profit by flipping properties without necessarily paying their fair share of taxes. Their tactics, known colloquially as 'paper flipping' or 'shadow flipping,' have also been cracked down upon in BC.
Renters will be pleased to hear about the rent control measures that Wynne unveiled, which will cap rent increases at 2.5 per cent annually and eliminate a loophole that exempts new developments from such caps. In addition to that, the government will be contributing $125-million to a five-year program that is intended "to further encourage the construction of new rental apartment buildings."
For a full overview of the measures that are coming to the province, click here.