By the time you read this article, the Ontario Provincial election is over. Ontario will have a change in government. The Liberals conceded this election 5 days before voting, in an attempt to pick up more seats and prevent the losing of “Party status” which will result in lost of funding for research and questioning privileges during questioning periods in Parliamentary sessions.
If the NDP won the election and forms a majority government, many of their bold and draconian policies will come into play during the next few years. The “Housing Speculation Tax” will be front and centre on their agenda, to be implemented immediately to bring in much needed revenues. The NDP also claims that this is the solution to make housing more affordable to Ontarians.
The “Housing Speculation Tax” targets the owners of second properties throughout the Golden Horseshoe. They will all be labelled as “speculators” and could face thousands of dollars in new taxes every year. Like the B.C. tax proposal, the Ontario NDP plan to begin with an annual speculation tax of $5 per $1,000 of assessed value, rising to $20 per $1,000 of assessed value. Using the average selling price of a residential property in Toronto in 2017 ($735,021) as an example, the extra tax would be $14,700 annually once the tax is fully implemented.
This new tax is an additional levy to the existing Non-Resident Speculation Tax (NRST), which would stay in place. Together, they will bring in a whopping $671 million in its first full year and increasing every year after that for the life of a first term of government.
The NDP has determined that “Housing speculation and flipping are driving up housing prices”. The “Housing Speculation Tax” will not be limited to foreign buyers. It will be targeted toward foreign and domestic speculators who do not pay tax in Ontario.” Just exactly what this second group of “domestic speculators” entailed is not immediately clear to everyone. This may simply be applicable to Canadians who are living outside of Ontario. I can think of scenarios where parents living outside of Ontario buying a house or apartment for their children attending Ontario universities instead of renting a property. They may be negatively impacted by this tax.
Currently, only foreign buyers are charged with a one-time 15% speculation tax (NRST) based on the value of the property in Ontario. The second annual speculation tax will apply to both foreign and domestic property owners. The NDP wants to avoid the problems associated with similar taxes in the Province of British Columbia (B.C.). They state that their version of the tax does not apply to family cottages, and that it doesn’t negatively impact rental stock. They make assurances that: “It will not apply to homes or residences that are rented out, it would apply to properties that have been left vacant for a significant period of time.”
Under the disguise of creating affordable housing, a tax is imposed on the free market if the NDP forms the Ontario Government. When the B.C. Model of “Housing Speculation Tax” is examined, one can see that taxes can be exempted if the property is “rented out”. I am sure that B.C. lawyers are already exploring “legal” loopholes to combat this tax at this very moment.
如果保守党在6月7日赢得选举，所有这些政策都不会实行。 造成安省缺乏“人们能承担得起的住房”的原因很多，但 “住房投机税”不是解决方案。
If the PC won the election on June 7, then all of this scheme and taxing will come to past. The “affordable housing” problem has many causes. The “Housing Speculation Tax” is not one of the solutions.
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