In an attempt to cut down on foreign speculation on Ontario housing, the government is increasing the Non-Resident Speculation Tax rate to 20 per cent, closing loopholes to fight tax avoidance and expanding the tax to apply provincewide.
Currently, the Non-Resident Speculation Tax rate is 15 per cent and only applies to homes purchased in the Greater Golden Horseshoe Region by foreign nationals, foreign corporations and taxable trustees. Increasing the tax rate to 20 per cent and expanding the tax to apply provincewide will strengthen efforts to deter non-resident investors from speculating on Ontario’s housing market and help make home ownership more attainable for Ontario residents.
The Government of Ontario is eliminating loopholes to support Ontarians who are trying to buy their first home by focusing Non-Resident Speculation Tax relief eligibility to only newcomers who commit to laying down roots in the province long-term.
Rebates for new permanent residents of Canada and related exemptions will be available to eligible newcomers to ensure Ontario continues to be welcoming to new Canadians. This includes an opportunity for foreign nationals studying and working in Ontario who become permanent residents of Canada to apply for the rebate.
“Young families, seniors and workers are desperate for housing that meets their needs. But a lack of supply and rising costs have put the dream of home ownership out of reach for too many families in the province,” said Peter Bethlenfalvy, Minister of Finance. “
Ontario is also working with municipalities that are looking to establish a Vacant Home Tax, which is another tool to increase the supply of housing. The authority for municipalities to implement such taxes exists in the Municipal Act. The City of Toronto has introduced a Vacant Home tax, and a number of other municipalities, including Ottawa, are also preparing to implement similar taxes. The Province will also establish a working group with municipal representatives to facilitate the sharing of information and best practices.
As well, Ontario will consult on potential measures to address concerns related to land speculation. For example, Ontario will explore ways to discourage construction slowdowns that may be artificially driving up prices of new homes for Ontario families through land speculation.