[digitalis]

Wynne to slap 15 per cent tax on foreign real estate speculators
https://www.thestar.com/news/queens...t-tax-on-foreign-real-estate-speculators.html

I haven't gone through all the details, but... "the levy would apply to home purchasers in the so-called Greater Golden Horseshoe who are not citizens or permanent residents."

 

[BobbyR2]

...offshore speculators, who are estimated to make up just 5 per cent of the current market.

5% isn't accurate, some use relatives in Ontario to purchase properties. Investing is a family thing for some.

 

[narduch]

5% isn't accurate, some use relatives in Ontario to purchase properties. Investing is a family thing for some.

We don't even have the real data. For all we know that's just bs from the Real Estate agents.

I've heard that the numbers are actually way higher for foreign buyers. Especially with condos.

 

[LNahid2000]

We don't even have the real data. For all we know that's just bs from the Real Estate agents.

I've heard that the numbers are actually way higher for foreign buyers. Especially with condos.

In addition, the number does not include any pre-construction units that have been sold to foreign buyers.

 

[drewp]

who do you think bought all the pre-construction condos in the early 2000s....foreign buyers. When most of the Cityplace buildings don't include the number 4, it is clear who they were marketing too.

Foreign Buyers have always been active in Toronto, now we can start to blame them, which this tax insinuates.

 

[jozl]

A 15% foreign "investor" tax will only result in raising prices by 15%, adding to an already grossly overpriced market. A tax of 50% is more likely to cool the market (too much to pass on to buyers). Add a speculation tax of 75% on real estate and watch the whole mess crash. If you want to speculate buy art or baseball cards or play the stock market but housing is a necessity which should be protected. Both of my adult children have left the city because of the high cost of housing. This current bubble is eroding the livability of Toronto and that is unacceptable.

 

[denfromoakvillemilton]

I think this is not enough. They still need to raise interest rate and the tax needs to be nearly 50% not 15%.

 

[TheKingEast]

I think this is not enough. They still need to raise interest rate and the tax needs to be nearly 50% not 15%.

That would be completely nonsensical.

What they need to do is a series of things. How about taxing those people who buy houses and flip them for double the price the next month? That is a huge factor in the rising house prices that no one seems to talk about. How about building more single family homes to support the demand instead of creating more? There are so many things they need to be doing right now.

 

[denfromoakvillemilton]

That would be completely nonsensical.

What they need to do is a series of things. How about taxing those people who buy houses and flip them for double the price the next month? That is a huge factor in the rising house prices that no one seems to talk about. How about building more single family homes to support the demand instead of creating more? There are so many things they need to be doing right now.

But look at BC. It went down for a bit. But then wen back up. Interest rates need to move for us to have a chance.

 

[LMVDR]

To begin with, my opinion is the government shouldn't interfere in the free market at all. If they really want to cool things down they can phase out CMHC insurance for new buyers. That would have an immediate moderating effect as Genworth cannot fill the gap itself. Otherwise do nothing. The market will sort itself out. Meantime start pumping out more affordable housing through grants and incentives to the private sector for those truly in need, not merely sick with house envy. Home ownership is not a right, it's aspirational.

But these measures- 15% foreign buyer tax (racist & discriminatory), rent control (anti-free market), vacancy tax (discriminatory and punitive), speculator tax (punitive)- collectively will have a very severe impact on new condo sales in the GTA. These measure strikes right through the heart of 50-60% of all pre-construction condo buyer's strategies.

The good times have surely ended for developers.

 

[kalvinone]

All good points above. Owning a house is not a right. Think of areas where housing prices are sky high - people primarily rent and those cities are still perfectly normal.

Forget foreign investment all together. They should really not even sell property to those who aren't Canadian Citizens. The homes shouldn't be a vacation spot for a wealthy - that's what hotels are for. Those that are new immigrants, rent until they get their citizenship. That should cool the market if indeed we have "THAT" much foreign investment.

 

[ponyboy]

To begin with, my opinion is the government shouldn't interfere in the free market at all. .

Agreed, but they are involved in so many aspects of the market and reluctant to let the market work.

If the government were to get serious about promoting free markets in housing, they would get out of insuring mortgages, leaving lenders to have full skin in the game. They would also end the "no capital gains" on principal residence sales, and end the various homebuyers incentive programs (grants, rrsp loans) and renovation tax credits. Rent control would be ended, and landlords would be able to price their unit rents at the going rate, and reward good tenants and push out bad tenants with greater rent increases. Public housing would be sold off to the private sector to do with as they wish (shouldn't govt stick to its "skill set"?). I'm probably missing a bunch of stuff. Some of the effects would be positive (reduction of bubble housing markets through fair market based pricing), but it would also exacerbate inequality and economic segregation in the city, at least in the short term.

 

[LNahid2000]

Agreed, but they are involved in so many aspects of the market and reluctant to let the market work.

If the government were to get serious about promoting free markets in housing, they would get out of insuring mortgages, leaving lenders to have full skin in the game. They would also end the "no capital gains" on principal residence sales, and end the various homebuyers incentive programs (grants, rrsp loans) and renovation tax credits. Rent control would be ended, and landlords would be able to price their unit rents at the going rate, and reward good tenants and push out bad tenants with greater rent increases. Public housing would be sold off to the private sector to do with as they wish (shouldn't govt stick to its "skill set"?). I'm probably missing a bunch of stuff. Some of the effects would be positive (reduction of bubble housing markets through fair market based pricing), but it would also exacerbate inequality and economic segregation in the city, at least in the short term.

Yep, there's no such thing as a free market in this country in the first place.

 

[ttk77]

I think caution is warranted here. What we want is a soft landing with price stagnation over a number of years to help improve affordability. What we don't want (or at least what I don't want) is a full on housing market crash and price free-fall. I don't like the rent controls announced, but the rest of the announcements IMO are sensible first steps. We can phase in even higher taxes on vacant units and a gradual phase out of the CMHC after gauging how the market reacts to the previous changes. Dumping massive changes onto the current system right from the start is the best way to end up with a huge disaster on our hands.

 

[Eug]

I too would like to see price stagnation for several years or even a mild drop. A major free fall would be a disaster. Those who can't buy a home now might just be out of a job if real estate dropped 50% all of a sudden.

Interestingly though, if they did drop 50%, prices would be where they were when I bought, back in 2007.

But look at BC. It went down for a bit. But then wen back up. Interest rates need to move for us to have a chance.

My understanding was that prices had already started the decline in Vancouver before the tax even hit.

In some areas for detached homes, the tax will have an affect but not much. In my area it won't have any affect at all since foreign buyers are pretty much nonexistent.

What this will affect is the condo market somewhat, which along with the rent controls, will make rental unit supply that much tighter.

As for rent control, I'm hoping there can be some happy medium. Yes it's ridiculous to have 50% rent increases in a year, but it's also ridiculous to limit rent increases to say 2.5%.