Toronto 15% Foreign tax, new Rent controls… it changes nothing!

15% Foreign home buyers tax, not a big deal

Last year, Vancouver introduced a 15% foreign homebuyers tax.  I predicted it would come to Toronto after 6 months.

Today, Ontario’s govt has copied Vancouver by introducing a 15% foreign homebuyers tax.   The hope is this will discourage foreign investors from buying and speculating on the Toronto housing market (by the way, there is no data to prove that foreign investors are a factor or contributing to the red hot housing market).

Vancouver tried this last year. But what happened?  The amount of sales slowed, but just temporarily. And house prices didn’t really drop.  This year, Vancouver house values are up over 3% and climbing.  

My guess is Toronto will see the same result as Vancouver… initial slower sales..no real price change… and no real change in house values..

Maybe foreign homebuyers aren’t the reason for house values going up so much?  One thing is for certain, the govt has a new tax and that’s gonna put some money in the empty provincial coffers.  Amazing how the govt solution is to bring in new taxes.

RENT CONTROL WON’T AFFECT MOST OF US.

It’s a popular topic.  I’m sure you saw the reports of rents being doubled for some renters in Toronto.  I do agree, that’s excessive.  But come on, this is the exception, it’s not the rule.  This has been blown out of proportion. Ask around..How many people do you know that has had their rent increased like this??  I’ve seen very few.

HERE’S A TIP… This new govt action won’t affect most of us.  Don’t let this discourage you from buying a rental property.  In fact, rental vacancies will most like drop making rental properties even more enticing…

If anything, the rent control will just make rental units less available.  History shows us that when you cap rents, you also reduce the supply of new rental units.   End result is going to be less available rental housing.   (I keep asking myself, why is Ontario repeating Vancouver’s mistakes?)

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca