STEP – Ontario copies BC in taxing foreign property-buyers

Enjoy this article courtesy of STEP:


“Ontario has become the second Canadian province to introduce a 15 per cent tax on foreign investors in residential property.


Part of an effort to cool Toronto’s housing boom, the ‘speculation tax’ will apply to all non-residents, temporary residents, and non-resident companies, with immediate effect as of 21 April 2017. It is limited to properties in the so-called ‘Greater Golden Horseshoe’ area, where property prices rose 33 per cent in the twelve months to March 2017, according to the Toronto Real Estate Board.


However, anyone obtaining a permanent residency or Canadian citizenship within four years of purchasing their home will be given a full refund, as will certain foreign nationals working in Ontario and international students.


The tax is part of a larger package of measures that also includes rent controls, extra municipal taxes on vacant properties, and so-called assignment clauses in sale contracts. The latter allow speculative buyers to sell the right to buy a property before completion.


The Ontario state government also intends to cooperate with the Canada Revenue Agency to ‘explore more comprehensive reporting requirements’ for enforcing taxes on property transactions. In any case, there will need to be a new requirement for Toronto property sellers to establish the residence status of their buyers, as is already the case in British Columbia.”