You've probably seen in the news that the Ontario Liberal government has announced a new housing plan. They announced this plan in an effort to bring down the incredibly high housing prices all over the province.
The changes are a lot to take in all at once. We've broken them down for you to help make it easier to understand, and so you can see the impact these changes will have when you're looking into buying and selling your Niagara home.
Higher Foreign Investment Taxes
The Niagara real estate market has seen some substantial foreign investment recently. In an effort to stop real estate "speculation" by foreign investors the Ontario government is introducing a 15 per cent "Non-Resident Speculation Tax" for the Greater Golden Horseshoe region (which is made up of Niagara, Hamilton, Halton, Peel, Toronto, York and Durham regions).
This tax will only apply to properties purchased by investors who are not Canadian or permanent Canadian residents, in an attempt to cool the market.
Preventing Property "Flipping"
The new housing initiatives put forward will attempt to put an end to what has been referred to as "property scalping" or "paper flipping". This is buyers who go into newly developed areas, purchase properties, and flip them for a much higher price than what they were first purchased at, all while avoiding paying high taxes.
This is similar to what other provinces, namely B.C., have done in the past to attempt to slow down rising prices, although Ontario is focusing heavily on buyers who buy homes ready to start construction to sell the contract on assignment before the homes are built.
Introducing a Vacancy Tax
Another notable change that Ontario is implementing is a vacancy tax. Toronto is following in the footsteps of Vancouver by implementing this tax. Vancouver introduced this tax in 2017 after announcing it in 2016, in an effort to lower the high housing vacancy rate the city has. Toronto's vacancy rate is not as high as Vancouver's, however, but the tax rate should ensure that it does not continue to climb.
The province is also planning to create new market housing and affordable-housing units, using provincial land surplus. There are also plans in place to create a "Housing Supply Team." This team will work to identify obstacles to housing developments, and to resolve these obstacles by working with developers and municipalities.
These changes come as an attempt to make buying a home a much more fair process for everyone, and to lower the rising prices of homes for sale. If you're ready to take on the Niagara real estate market and either list your Niagara home or buying a new home, connect with Team Davids and get started.