In total, 16 new measures were recently introduced with regards to housing in Ontario in the past month. Now that the dust has settled, we thought we’d take a look at these and how they might impact you.
Although it is unlikely that any one person will be impacted by all 16 measures, several of the measures may affect you or someone you know.
Understandably, the impact will very much depend on your individual circumstances, so to help you make sense of it all, we have broken out all the key elements and arranged them into four easy to navigate sections depending on what your circumstances might be.
So click on the section that applies to you:
With regards to potential impacts, our professional opinions are represented below.
Section 1 – You Are a Renter or Looking to Rent
– The legislation introduced significant new protections for people who are renting and leasing in Ontario. The legislation includes new updates to existing legislation that protects tenants.
– Rent controls have been extended to properties built after 1991. This means that every single landlord in Ontario – regardless of when the property was built – will not be able to force large rent increases on their tenants. Rent increases will now be based upon inflation, as determined by the Government. This was already the case for buildings built before 1991.
– The introduction of the ‘vacant property tax’ (which isn’t in force yet, but will be eventually as a result of this announcement) should lead to more units coming on to the market. This will likely flatten or lower rent prices, and provide you with a wider choice.
– Adjustments to the property tax for multi-unit buildings (e.g. Apartments and Condos) will encourage developers to build more. This should lead to more units becoming available and help to slow down rent prices.
– Several measures were introduced to help with the development of new properties: Government land has been opened-up for sale, a $125m 5-year development rebate has been created, a ‘Housing Supply Team’ is being formed, tax tools are being created to help unlock development opportunities
These measures were designed to help with the development of more homes in and around the GTA. Once again, this will likely result in more units becoming available to rent.
– This is great news for people currently renting, leasing or looking to do so in the future. These new laws will help protect you against substantial rent increases.
– Several new measures designed to encourage developers to build condos and apartments will help increase supply to the rental market.
– Increased supply coupled with the upcoming vacant property tax, will lead to more units being available to rent. Prices should flatten or lower as a result.
Section 2 – You Are Already a Homeowner (And Not Looking to Sell or Move)
– If your property is empty, you will likely have to pay a ‘vacant property tax’ down the line.
– If you rent out your property, you will have to comply with new rules and measures aimed at landlords. See the rental section above.
– Several measures were introduced to help with the development of new properties. Measures include; opening-up the sale of Government land, a $125m 5-year development rebate, a new ‘Housing Supply Team’ being formed, and tax tools created to help unlock development opportunities. These measures were designed to help with the development of more homes in and around the GTA. These should help ensure that affordable housing is built and that demand is met. This will likely mean that mortgage rates continue to stay low.
– If you own a vacant property, you will be facing a new tax in the near-future.
– One thing to consider is that prices (for Condos in particular) may start to flatten or come down slightly as a result of the increase in supply that these measures will inevitably result in. Now would certainly be a good time to consider refinancing (while we are seeing attractively low mortgage rates) and possibly taking some equity out of your home. We can provide more information on these options at your request.
Section 3 – You Are Buying a Home or Looking to Buy
– If you are buying as a non-resident (private foreign purchaser), you will now have to pay a 15% tax on top of the purchase price. Essentially, you will need to be a citizen, permanent resident or foreign Corporation to avoid this tax. On becoming a citizen or permanent resident, you will receive a rebate if you have been affected by the tax previously.
– Several measures were introduced to help with the development of new properties. Measures include; opening-up the sale of Government land, a $125m 5-year development rebate, a new ‘Housing Supply Team’ being formed, and tax tools created to help unlock development opportunities. These measures were designed to help with the development of more homes in and around the GTA. This will potentially help to slow down property price increases, especially among the Condo market – which have almost completely been driven ever higher by a limited supply of houses in the GTA.
– The introduction of the ‘vacant property tax’ (which isn’t in force yet, but will be eventually as a result of this announcement) should lead to more properties finding their way on to the market as investors sell off their vacant properties to avoid paying this tax. This should further increase supply and potentially slow down price growth.
– Adjustments to the property tax for multi-unit buildings (e.g. Apartments and Condos) will encourage developers to build more. Again, this should lead to more supply and help to slow down price growth, particularly in Condos.
– This was largely good news for people looking to buy, unless you are non-resident.
– These moves were designed to encourage more development – it has long been known that the limited supply of properties for sale is responsible for house prices increasing so drastically in recent times. By introducing measures to encourage the development of new properties, prices should start to level out as demand is met and more affordable housing should become available for people wishing to buy.
– If the measures work out similarly to what happened in BC, there may be a short-term 2-3 month window where home price growth stalls – due to sellers who were on the fence before now deciding to enter the market. So the next 2-3 months could be a great opportunity to purchase.
Section 4 – You Are Selling a Home or Thinking About Selling
– The introduction of the ‘vacant property tax’ (which isn’t in force yet, but will be eventually as a result of this announcement) means you may need to consider what to do with any properties you own that are sitting vacant.
– The measures have seen an increase in listings – although we are still in a seller’s market. Selling may – for the time being – take a little longer than we are used to because there are a few more homes on the market.
– New procedures and an investigation into Real Estate practices by Realtors were introduced to help both buyers and sellers. This is a good thing, and it is attempting to fix some loopholes that certain Realtors were exploiting, damaging the housing market in the process.
– If you have a vacant property, the new tax may encourage you to look at your options.
– There are to be long overdue investigations into Realtor practices which may have been damaging the housing market. This should hopefully benefit buyers and sellers alike.
– If you were sitting on the fence with regards to selling, this might be the push you needed. If these measures do as they were intended, house prices should start to flatten out a little or even possibly fall, however it remains to be seen as to whether this initiative was enough to create this change and only time will tell. You should, however, expect your sale to take a little longer and not rush it.