Ontario has become the second Canadian province to impose a tax on overseas property buyers.
Following in the footsteps of British Columbia, Ontario has introduced a 15 per cent Non-Residential Speculation Tax (NRST), The tax will cover purchases in the Greater Golden Horseshoe area, which includes Toronto and its surrounds.
The move is designed to cool the residential real estate market in the region. Property price growth in and around Toronto is exceeded only by Vancouver in BC, and both cities have average property prices far above the national average.
“The non-resident speculation tax has nothing to do with new Canadians and people who want to make Ontario their home,” said Ontario premier Kathleen Wynne, upon announcing the tax. “With this tax, we are targeting people who aren’t looking for a place to raise a family, they’re looking only for a quick profit or a safe place to park their money.”
With that in mind, the new tax will not apply to foreigners who are part of Ontario’s Immigrant Nominee Programme and rebates may be available for up to four years for students enrolled on a full time two-year course.
Last year, a similar property tax was introduced in BC, affecting transactions in Vancouver. Figures released by the British Columbia Ministry of Finance in March suggested the introduction had been successful in cooling the market. Foreign investment in British Columbia was down to 4 per cent of transactions – from 13 per cent a few months earlier. What’s more, property prices in the city dropped by 18.9 per cent between January 2016 and January 2017.
Under the new laws in Ontario, home buyers will now be required to give information about their residency and citizenship status and how they intend to use the property.
Article published 3rd May 2017