Metro News: New tax, rent controls part of Wynne’s plan to protect tenants and homebuyers

Premier Kathleen Wynne is taking wide-ranging action to protect tenants from massive rent increases and homebuyers from being gouged.

 

As first disclosed by the Star, Wynne is immediately imposing a 15 per cent foreign buyers’ levy — the non-resident speculation tax — to slow down southern Ontario’s skyrocketing real estate market that the Bank of Canada has warned is unsustainable.

 

The tax, modelled on British Columbia’s measure for Vancouver, “would apply ‎to transfers of land that contain at least one and not more than six single family residences” and affect buyers who are not citizens or permanent residents as well as foreign corporations.

 

It will hit all residential transactions in the Greater Golden Horseshoe — including the Greater Toronto and Hamilton Area, Niagara, Brant, Haldimand, Kitchener-Waterloo, Barrie, Orillia, and Peterborough.

 

“Ontario welcomes everyone, but a 15 per cent non-resident speculator tax targets people looking only for a quick profit, not a place to call home,” Wynne told reporters at the Williams Landing‎ pub in Liberty Village on Thursday against a backdrop of gleaming condo towers.

 

“Our hot housing market is tied to the confidence people have in the Ontario economy — an unwanted consequence that has become unaffordable,” the premier said.

 

Wynne insisted the sweeping changes — in the 14th year of Liberal governance — were not designed to boost her sagging political fortunes.

 

“Our Fair Housing Plan is about helping people to be able to buy a home; it’s about being able to afford to rent a home … my objective is to make sure that we help people.”

 

Finance Minister Charles Sousa, who is tabling a balanced budget next Thursday, said exemptions would apply to refugees, international students, foreign nationals working in Ontario and rebates would be paid to buyers who subsequently become citizens or permanent residents.

 

Sousa, who said the changes should be revenue neutral because any proceeds from the new levy would be offset by lower land transfer taxes, said the government had to act because house prices are up 33 per cent year over year in Toronto.

 

To help tenants, there will be rent controls limiting increases on all buildings to the rate of inflation — as long as it is 2.5 per cent or lower. Currently only units built before 1991 are subject to such curbs. Landlords will continue to be able to gain allowances to pay for renovations.

 

The city of Toronto and other municipalities would be empowered to ‎slap a vacant homes property tax to discourage investors from sitting on empty homes.

 

There will be a new five-year, $125-million program to encourage the construction of new r‎ental apartments by rebating builders a chunk of development charges.

 

A “housing supply team” of provincial officials will be struck to find ways to streamline the building of new homes — a move welcomed by Ontario Home Builders’ Association CEO Joe Vaccaro.

 

“We’re happy see the focus of the announcement is on supply,” said Vaccaro, expressing hope that expedited approvals for new construction will address demand.

 

Wynne said the Liberal government would work with the real estate industry to reduce property speculation, including the questionable practice of “paper flipping” houses for quick profit.

 

She added that the province will review the rules surrounding real estate agents to ensure buyers are getting a fair shake in bidding wars.

 

Ontario Real Estate Association CEO Tim Hudak said the government’s moves “should help.”

 

“We’re pleased to see that the government has listened,” said Hudak, who has met more than dozen times with Wynne, Sousa, and other officials in recent months to discuss housing affordability.

 

“Increasing the supply of homes is the best way to give buyers a better shot at home ownership and the government has committed to working with municipalities to remove the barriers to getting more new homes and listings on the market faster,” he said.

 

Hudak said an upcoming modernization of Ontario’s real estate legislation, which dates back to 2002, will also help.

 

Toronto Mayor John Tory said he was pleased the government plans to “activate surplus provincial land” like the West Don Lands and a parcel at Grosvenor and Grenville Sts. near Queen’s Park for affordable housing.

 

“I’m also gratified that the provincial government will allow the city to move forward with a vacant homes tax … other measures to curtail speculation and add new supply into the marketplace right away,” said Tory.

 

But Wynne’s political opponents were less enthusiastic.

 

NDP MPP Peter Tabuns (Toronto Danforth), who has been pushing for rent controls, said the Liberals are only taking action because “they’re desperate” with an election less than 14 months away.

 

“Their polling numbers are in the basement. They’re in a crisis. They want to do something dramatic, they think this will work, so they’re acting on it,”

Progressive Conservative MPP Ernie Hardeman (Oxford) said the Liberals “have finally come up with an answer” after years of inaction.

 

“The government believes that taxation will solve this problem. The problem is red tape in the development industry and we just are not producing the units we need,” said Hardeman.

 

ACORN Canada president Marva Burnett said “stricter regulations for … rent increases will close a significant rent control loophole in the province.”

 

“This is undoubtedly a significant day for tenants in Ontario,” said Burnett.

 

But landlords were furious.

 

“Today’s announcement … will put thousands of units and millions of dollars in provincial revenues at risk. It is a rash, politically motivated decision, which will hurt — not help — generations of Ontario renters,” warned Federation of Rental-housing Providers of Ontario president and CEO Jim Murphy.

 

In a positive move for apartment dwellers, Trinity-Spadina Liberal MPP Han Dong’s‎ private member’s bill to ensure elevators are repaired in a timely manner will now be enshrined in law.

 

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Article source: Metro News