Ontario is introducing a Fair Housing Plan, comprised of 16 measures, in an effort to make housing more affordable for homebuyers and renters and bring stability to the province’s real estate market.
These measures include introducing legislation that, if passed, would apply a 15 per cent Non-Resident Speculation Tax (NRST) on non-Canadian citizens, non-permanent residents and non-Canadian corporations buying residential properties containing one to six units in the Greater Golden Horseshoe (GGH). This measure aims to address unsustainable housing demand in the region, which has experienced dramatic price increases over recent months.
Refugees and nominees under the Ontario Immigrant Nominee Program would not be subject to the NRST. Depending on their eligibility, a rebate would be available for those who have attained citizenship or permanent resident status as well as foreign nationals working in Ontario and international students.
In an effort to increase housing supply in a province where the average vacancy rate dropped to 2.1 per cent last fall, its lowest figure since October 2003, Ontario plans to establish a program to leverage the value of surplus provincial land assets to develop a mix of market housing and new, permanent, sustainable and affordable housing supply. The plan also proposes introducing legislation that would empower the City of Toronto and potentially other interested municipalities to introduce a vacant homes property tax to encourage property owners to sell or rent unoccupied units.
Other measures included in the Fair Housing Plan include:
- Expanding rent control to all private rental units in Ontario, ensuring rent increases can only rise at the rate indicated in the annual provincial rent increase guideline;
- Updating the Residential Tenancies Act to include a standard lease agreement, tighten provisions for “landlord’s own use” evictions, and make the process fairer and easier for tenants and landlords;
- Ensuring property tax for new multi-residential apartment buildings across the province is charged at a similar rate to other residential properties, encouraging developers to build more purpose-built rental housing;
- Introducing a $125-million, five-year program to encourage the construction of rental apartment buildings by rebating a portion of development charges;
- Providing municipalities with the flexibility to use property tax tools to help create development opportunities;
- Creating a Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers to find solutions;
- Understanding and dismantling practices that may contribute to tax avoidance and excessive speculation in the housing market, such as “paper flipping”;
- Reviewing the rules real estate agents must follow to ensure that consumers are fairly represented in real estate transactions;
- Establishing a housing advisory group to provide the government with ongoing advice about the state of the housing market, discuss the impact of the Fair Housing Plan and any additional steps that may be needed;
- Educating consumers on their rights;
- Partnering with the Canada Revenue Agency to explore more comprehensive reporting requirements to ensure correct federal and provincial taxes are paid on purchases and sales of real estate in Ontario;
- Making elevators in buildings more reliable by establishing timelines for elevator repair in consultation with the sector and the Technical Standards & Safety Authority (TSSA); and
- Working with municipalities to better reflect the needs of the growing GGH region through an updated Growth Plan, including requiring municipalities to consider the appropriate range of unit sizes to accommodate a variety of household sizes and incomes.
In recent months, Ontario has introduced other measures to help moderate housing affordability, including doubling the maximum Land Transfer Tax refund to $4,000 for qualifying first-time homebuyers and freezing the municipal property tax burden for multi-residential buildings in regions where these taxes are high.
“People work hard to provide for their families. They should be able to rent or enter the real estate market without making great sacrifices or taking on a huge amount of risk,” said Ontario Premier Kathleen Wynne in a statement. “At the same time, we recognize the need to protect the significant investment homeowners have made. This plan balances those needs to stabilize the market and prevent a sharp correction that would be harmful to everyone.”