Provincial measures to cool housing market expected to be unveiled Thursday
Ontario Finance Minister Charles Sousa speaks to the media after talks on housing market in the Greater Toronto Area with Federal Finance Minister Bill Morneau and Toronto Mayor John Tory in Toronto on Tuesday, April 18, 2017. THE CANADIAN PRESS/Chris Young
Allison Jones and Jessica Smith Cross, The Canadian Press
Published Wednesday, April 19, 2017 1:23PM EDT
Last Updated Wednesday, April 19, 2017 8:49PM EDT
TORONTO - Ontario's highly anticipated package of housing measures is set to be announced Thursday and will take aim at speculators, expedite more supply, tackle rental affordability and look at realtor practices.
The provincial Liberal government has been facing increasing pressure to cool the market in the Greater Toronto Area, where the average price of detached houses rose to $1.21 million last month, up 33.4 per cent from a year ago.
The intention of the package is to “give everyone some breathing space” in a frenzied market, Premier Kathleen Wynne said Wednesday.
“What we're aiming to do is to bring in some initiatives that will help people in that whole continuum of housing right from rental through to purchasing a home without having unintended consequences,” she said in Ottawa.
“If we look at what economists are saying, look at what folks who are trying to buy a home are saying, it's really gotten to the point where it is out of control and we need to do something.”
Ontario Finance Minister Charles Sousa has spoken frequently in recent weeks about going after speculators, who buy houses in the hope of turning a profit rather than to live in.
“We want to make sure that whoever is speculating is in fact paying their fair share,” he said Wednesday. “That means those who are trying to take advantage of capital gains exemptions, shouldn't be. They should be paying income on those issues, and I'll have more to say on that in the coming days.”
Sousa has been considering a tax on non-resident speculators, but he has declined to clarify what that could look like.
“As you know, there are a number of speculation activities within our market, by domestic and non-resident Canadians, so we're looking at what we should be able to do for the benefit of Ontario and our economy,” he said.
Sousa has said families are “pissed” they can't win bidding wars, and suggested such activities will be dealt with in the housing package.
“The realtors themselves have asked for a little more transparency and determination as to how operations are,” he said. “They themselves have said, you know, we want to make sure our sales practices are appropriate, they're transparent, that buyers and sellers understand what's happening in the marketplace.”
The package will also deal with how to expedite the availability of housing supply, Sousa said, as the government has heard complaints from builders that the process is too cumbersome.
Sousa discussed vacancy rates that are constraining supply at a meeting this week with the federal finance minister and Toronto Mayor John Tory, who has been talking about a vacant homes tax.
The three agreed at their meeting that in the short term, none of the levels of government will bring in new measures for homebuyers that would further boost demand, suggesting it's unlikely first-time homebuyers will see any incentives in the near future.
Late last year, Ontario announced it would double the rebate on its land transfer tax for first-time homebuyers to $4,000 in an effort to help them enter the housing market. Under the new rules, which took effect on Jan. 1, first-time homebuyers don't pay any land transfer tax on the first $368,000 of a purchase price.
At the time that was the really pressing issue, Wynne said.
“The market was not as hot as it is now, but first-time homebuyers were still feeling a real challenge and so had I had a crystal ball, would we have done all of it at once?” she said. “Maybe, but I didn't have that crystal ball and so we made a decision then and what we're trying to do now is make sure we bring in a robust enough package that we have some checks and balances within it.”
Ontario is also moving to collect more information on the housing market.
As of Monday, the province will require homebuyers to provide information about who they are, and how they intend to use the property, according to a new post on a provincial government webpage.
The information is being collected through the land transfer tax system.
Buyers will be required to give information about their residency, citizenship and permanent resident status, if they're buying the home for the benefit of anyone else, or, if the buyer is a corporation, about the ownership and control of the company.
They'll also be required to say if the home is intended for their use, or if they intend to lease it out.
The new form homebuyers or their lawyers will have to fill out won't be available until Saturday, but it will be mandatory by Monday.
Sousa has admitted the government doesn't have good data on the real estate market, even as he has prepared the package of market measures.
Ontario Housing Minister Chris Ballard has also said the provincial government has been developing “substantive rent control reform” amid calls to end a rule that sees annual rent increase caps only apply to residential buildings or units constructed before November 1991.