Ontario Premier Kathleen Wynne said that the province will not follow British Columbia’s move to introduce a tax on foreign homebuyers. “We’re not going to go down the road that British Columbia has gone down,” Wynne said at a press conference.
“I’m not interested in doing something that would have an unintended consequence in Ontario – something that was designed for a totally different market.” Wynne added Ontario will present some housing proposals in the “not too distant future,” but said they will primarily aim to help first-time buyers afford homes.
In August, the British Columbia government implemented an additional 15-per-cent property transfer tax on foreign nationals who buy real estate in Metro Vancouver. The move was aimed at addressing low vacancy rates and cooling skyrocketing prices. According to the Real Estate Board of Greater Vancouver, home sales in the city dropped nearly 33 per cent in September, compared to the same period last year.
The Ontario government is moving to double the maximum tax rebate offered to first-time homebuyers while boosting the land-transfer tax on house purchases above $2 million.
Finance Minister Charles Sousa made the announcements in his fall economic statement, delivered in the provincial legislature. The changes are to take effect on Jan.1, 2017.
"Purchasing your very first home is one of the most exciting decisions in a young person's life, but many are worried about how they will be able to afford their first condo or house," he told the Legislature. "Improving housing affordability will help more Ontarians to participate in the housing market."
Sousa said first-time buyers won't pay any land transfer tax on the first $368,000 of a purchase price, and they will become eligible for a rebate of up to $4,000 in provincial land transfer tax, levied on the purchase of every house and condominium. Meanwhile, the land-transfer tax rate on the amount of a purchase above $2 million will rise to 2.5 per cent, from the current rate of 2 per cent.