Ontario government released a package of housing measures to cool the overheated housing markets in April. Bob Mok addresses the implications of the vote buying measures in his third article of the column series. To read his previous articles in the column, please refer to http://chinesenewsgroup.com/news/661921
The following are outlines for the rest of the new housing rules put forward by the Ontario Provincial Government in April, 2017. Many of these policies have yet to be finalized and implemented.
Working with CRA to tackle tax avoidance and speculation
The government is focusing on buyers who invest in new buildings and then sell the properties before the deal closes – this is known as “paper flipping.”
This is an unfair practice in which speculators buy up floors of new condo towers and new housing developments before families can put in bids. The province is going to work with the Canada Revenue Agency to make sure all taxes, especially land transfer taxes, are paid by paper flippers and other speculators.
In Vancouver, foreign speculators are already finding loopholes around the new tax. There are reports of foreign buyers creating Canadian corporations with local directors while hiding the foreign shareholder, as well as using local proxies.
Review of real estate rules
The Ontario Real Estate Association wants the provincial government to revisit Ontario’s act regulating real estate agents and brokers.
Part of the review will focus on real estate agents themselves acting on behalf of both the selling and the buying parties. There is a definite case of “Conflict of interests” involvement in that situation.
Tax fairness for new apartment buildings
There will be legislations to ensure that property taxes for new multi-residential apartment buildings are charged at a “similar rate” as other residential properties to encourage builders to construct more rental housing. This means that condominium property taxes may go up.
省府将允许市政府对已经批准用于新住房的空置土地征收更高的税收。这样做将防止开发商得到土地后却不开发的状况 – 开发商的这种做法几十年来很普遍。
Municipalities could be allowed to impose higher taxes on vacant land that has been approved for new housing. This would discourage developers from holding on to land that’s ready for housing – a practice that has been going on for decades.
Education for consumers
The province is committing to informing consumers about their rights, particularly on the issue of a real estate agent representing more than one party in a transaction.
Provincial land for affordable housing
New program to “leverage” surplus provincial land to develop “a mixed of market housing and new, permanent sustainable and affordable housing supply.” Just how much land would be available, and how quickly and on what terms, wasn’t yet known.
Encourage diverse development
New measures would require municipalities to consider the appropriate range of unit sizes in higher-density residential buildings to accommodate a diverse range of household sizes and incomes. Larger apartment units will be encouraged but this is assuming that there is a demand from large families.
Many of these policies should have been implemented years ago. The fact that they are pushed to the front of the line at this critical junction just prior to the General Elections gives us the impression that once again the Government is bribing us with our own money. The immediate effect is that the real estate market has now come to a stand still with many buyers waiting for a downward adjustment of the housing prices. The number of transactions dropped but “affordable” housing is still nowhere in sight for many.
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