Ontario, Canada brings in foreign housing tax to cool market

Posted April 21, 2017

London and NY have shown that rent controls are a disincentive to building new units, because they curtail the potential return on investment for pension funds and other investors in these kinds of developments, said the business group's CEO.

"It's a great start", she said, but called rent control only "one piece of the pie".

"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.

The issue has become a headache for the province's Liberal government, which is trailing the Progressive Conservatives in polls ahead of an election in June next year, and lawmakers face a hard balancing act to find policies that will stabilise prices without crashing the market. That's 2.5 per cent for 2017.

Also, there will be an expansion of rent controls to all buildings. This year it is 1.5 per cent.

It's too late for west-end tenants profiled in a Metro/Toronto Star story from earlier this month who were informed their rents would double in July.

Wynne was asked how effective the measures will be when demand for homes continues to outstrip supply and bidding wars on downtown homes are commonplace.

Harris also wondered whether the long-term impact of rent control might serve to make the rental market tighter.

"The landlord's use thing is going to be very, very important", said Geordie Dent, executive director of the Federation of Metro Tenants' Associations. Under these changes, landlords would still be able to apply vacancy decontrol and seek above guideline increases where permitted. While this is good news, our government has become increasingly concerned about rapidly rising rents and housing prices, and their impact on the many people looking to find a home. "They should be paying income on those issues, and I'll have more to say on that in the coming days".

Morgan Stanley Q1 Profit & Revenue Blow Away Expectations
Bank of America Corp., by contrast, posted stronger trading revenue that helped fuel a 40 percent surge in first-quarter profit. Hong Kong's Hang Seng index climbed 0.3 percent to 23,905.35 and Australia's S&P ASX 200 edged 0.1 percent higher to 5,812.30.

One economist, Jimmy Jean of Desjardins Capital Markets, said a tax on foreign buyers in Ontario could prompt nonresident investors to move elsewhere - such as markets in Montreal and Calgary.

Ottawa has also launched consultations on a policy that could see banks shoulder more of the risk for mortgage defaults.

"Rent controls are in place".

It will apply to all residential purchases made by those who are not citizens or permanent residents of Canada, as well as foreign corporations.

The new legislation would also allow Toronto-and possibly other municipalities-to table a tax on vacant homes.

Toronto Mayor John Tory says there's a growing divide in the city between people who can afford to live and work here and those who can't, but he points out that there's no silver bullet to the problem.

- Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.

A rebate of development cost charges to encourage building of more rental housing.

The province pledges to use surplus provincial land for additional affordable housing. A few such sites are now being considered for a pilot project, including the West Don Lands, 27 Grosvenor (parking garage for the former Coroner's building) and 26 Grenville (podium of the former Coroner's building) in Toronto.