Ontario Raises Foreign Homebuyer Tax For The Second Time This Year
Ontario’s non-resident speculation tax on homes purchased by foreign nationals has been raised from 20% to 25% starting Tuesday.
Applied to foreign individuals, corporations, or taxable trustees who buy homes in Ontario, the increase aims to discourage foreign speculation as the province seeks to address its housing shortage.
“Young families, newcomers and those all over the province dream of having their own home, a dream which continues to be out of reach for too many,” said Minister of Finance Peter Bethlenfalvy. “To help Ontario homebuyers, our government is increasing the non-resident speculation tax rate by another five percentage points to 25%, making it the highest in Canada, to further discourage foreign speculation in Ontario’s housing market.”
The move follows the increase from 15% in March, when the Progressive Conservative government also expanded the tax to include homes in the whole province, versus initially only covering the Greater Golden Horseshoe area in southern Ontario.
On Tuesday as well, Premier Doug Ford introduced new legislation that would allow building three units in each lot, as part of the government’s plans to build 1.5 million homes in the next 10 years.
The province’s non-resident speculation tax rate is now the highest in Canada. But some say that it will not have much impact on Ontario’s housing crisis, as foreign ownership only accounts for a very small portion of homes.
Data from StatCan’s 2018 Canadian Housing Statistics Program show that non-resident ownership of housing was only 2.2%. A 2020 survey from CMHC found that number to be lower than 1% for condo apartments in major urban centers from 2016 to 2020.
Information for this briefing was found via Statistics Canada, CMHC, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.