Ontario Moves Forward on Foreign Buyers Tax and Seniors' Public Transit Credit
Living in Mississauga comes with quite a price tag, especially for those entering the housing market or taking public transit. For homebuyers and seniors in particular, stable housing and public transit prices could relieve some stress.
The province has proposed legislation that aims to increase housing affordability for people in the Greater Golden Horseshoe (GGH) and make public transit more affordable for seniors.
To try and combat these issues, the province has developed the Budget Measures Act (Housing Price Stability and Ontario Seniors’ Public Transit Tax Credit), 2017.
"With a growing economy and a balanced budget, we are investing in key services and programs while finding ways to reduce everyday costs for families," said Minister of Finance Charles Sousa. "These include addressing recent price increases in our housing market and helping seniors stay engaged in their communities by reducing travel costs when they use public transit."
First, the Wynne government plans to enact a new Ontario Seniors’ Public Transit Tax Credit that would make public transit more affordable for seniors throughout the province. This would mean that starting July 1, 2017, the refundable credit would be equal to 15 percent of a senior’s eligible public transit costs.
Moreover, the credit would apply for the 2017 and subsequent tax years. For the 2017 taxation year, only payments for the use of public transit services between July 1 and December 31 would be eligible for the credit.
This is all well and good, but the more pressing feature on the Budget Measures Act 2017 is that the government plans to implement a 15 percent Non-Resident Speculation Tax (NRST) on non-Canadian citizens, non-permanent residents and non-Canadian corporations buying residential properties in the Greater Golden Horseshoe.
According to the province, the NRST, which is part of Ontario’s new Fair Housing Plan, would help address unsustainable demand in the region, while ensuring Ontario continues to be a place that welcomes all new residents.
This legislation is essentially the foreign buyers tax that Sousa had been talking about for months that will supposedly cool down skyrocketing housing prices.
However, Sousa had admitted at the time that there was no data to show how widespread foreign buyership, buying and selling houses in a short period of time, or a combination of the two, is in Ontario
Earlier this month, we reported that foreign buyers activity actually remains low in Ontario.
The Toronto Real Estate Board (TREB) announced that it had examined property assessment and land registry data in Ontario and concluded that foreign buyer ownership, as well as speculation by foreign and domestic buyers and multiple ownership in the Greater Golden Horseshoe housing market remains low.
It seems that the government is moving forward with the foreign buyers tax anyways to attempt to curb soaring housing market prices. To what extent the tax will help or not remains to be seen should the legislation be approved.
There are exemptions from the NRST for refugees, nominees under the Ontario Immigrant Nominee Program, or if the purchaser jointly acquires the designated land with a spouse who is a Canadian citizen, permanent resident of Canada, refugee or nominee.
The NRST is one of 16 measures the province hopes will start stabilizing and cooling down the red hot housing market as part of Ontario's Fair Housing Plan. The tax would apply to residential properties purchased or acquired on or after April 21, 2017 in the GGH.
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