On April 20, 2017, the Government of Ontario made some ground-breaking changes to the housing laws of the province related to home ownership and tenancies.
The new plan is intended to make housing in the province more affordable for buyers and renters alike. Below are some of the key aspects of the plan:
Rent is Now Capped
Rent for all private rental units in the province will now be capped. In general, rent will only be allowed to be increased per annual provincial rent increase guideline. The exemption from the annual provincial rent increase guideline for units built after 1991 has effectively been eliminated. Landlords will be permitted to apply to the Landlord and Tenant Board for permission to increase rent by more than the annual provincial rent increase guideline but they will have to meet the appropriate criteria.
Tax on Foreign Home Buyers
Residential homes in the Greater Golden Horseshoe area which roughly stretches from Windsor to Peterborough will become subject to a new 15-per-cent Non-Resident Speculation Tax (NRST). The transition period with respect to this new tax passed on May 8, 2017. Therefore, as of last week all transactions are required to make NRST declarations.
The government has exempted some groups from the NRST such as: refugees and nominees under the Ontario Immigrant Nominee Program. Moreover, a rebate is going to be made available for people who subsequently attain citizenship or permanent resident status, foreign nationals working in Ontario, and international students.
A Future Vacant Homes Tax
The City of Toronto and the Government of Ontario are working on introducing a vacant homes tax. The purpose of this tax is to incentivize investors which are currently holding approximately 65,000 unoccupied homes in Toronto to rent these properties out to the public. The city and the province hope this potential tax will increase the rental supply and decrease prices across the rental market.
Targeted Construction Fund
The Government of Ontario is introducing a five year $125 million program to work with municipalities encourage the construction of new apartment buildings. By doing so, the province aims to increase the housing supply causing the market prices to decrease for buyers and renters.