04/22/2017
Observations regarding Ontario’s Fair Housing Plan:
There is an attempt to address the demand side by imposing a 15% tax on foreign buyers and non-resident speculators.
There is an attempt to address the supply side by encouraging investors, builders, and developers to increase construction. The government wants an increase in construction of rental buildings and will provide incentives and rebates. “A five-year, $125-million program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.”
Legislation regarding rights of tenants will be improved, as last month a landlord had increased the rent by approximately 200% in Scarborough. In short, to prevent abuses like this and safeguard tenants.
A special advisory group (Housing Supply Team) regarding how to improve the real estate market will be established (ladies and gentleman start applying for jobs on Monday :) Additionally consumers will be educated regarding issues such as multiple representations (where agents represent both the buyer and the seller simultaneously).
Issues such as tax avoidance will be studied and policies to correct such issues will be undertaken.
Important considerations:
The interest rates are around 2.59 to 2.99 % today rather than around 7.25 %, which was in place 10 years earlier. The cost to borrow is still relatively cheap.
There are a lot of immigrants coming to the Greater Toronto Area and call it their home.
According to Canadaimmigrants.com
In 2016, Canada admitted 296,340 new permanent residents –a 9% increase from the previous year. Out of which 110,015 were from Ontario.
Lastly, the offer presentations feature is still there so people who were thinking that they will wake up and find the real estate market corrected are in for a shock. These measures will take some time to have the desired effect and it is uncertain how effective they will be.
Note: This information is intended for educational purposes and not intended to be legal or accounting advice. For legal and accounting advice please contact competent lawyers and accountants.
If you are thinking of selling real estate and have questions, call me. This is a wonderful time to sell real estate in the Greater Toronto Area.