By now, you’ve likely heard of the proposed changes to the real estate market that the Ontario government has brought forward. Before I go any further, please remember that none of these changes are law. As of right now, these are simply suggested measures the government hopes will improve the current situation.
And what is that situation? Year-over-year housing property value increases of over 30%. Rental costs skyrocketing in the downtown core. The real estate market in Toronto is on fire, but I’d be lying if I didn’t admit that continuing to move at this pace is unrealistic.
Another part of me is saying that this is what you should expect living in what is now a world renowned city. You want to live in Toronto and have the theaters, cafes, art galleries, and clubs right at your doorstep, then you pay the price. But, again, I certainly am sympathetic to the drawbacks from the current state of the market.
That being said, the government has recently made public a few policies they hope will benefit all Ontario homeowners. While there are 16 actual proposals, here are a few of the highlights:
- A 15% non-resident speculation tax.
- Rent control on all private rental units, including those built after 1991.
- The implementation of a vacant home property tax.
- $125 million proposal to encourage construction of new rental units by “rebating a portion of developmental charges.” This funds will span over a period of five years.
- Creation of a dedicated Housing Supply Team.
- Structure to ensure both residential properties and new apartment buildings are charged similar rates of property tax.
- Adding provisions that would take into consideration the size of units in high density municipalities and how those units can better accommodate the diversity in households, incomes, etc.
There is also a specific proposal that is worth elaborating. There are steps being taken to ban “assignment flipping,” which takes place in the pre-construction phase of development. This is the practice of investors putting down payments on several units (typically condo units, but not always), and then selling those titles for profit before development is complete. If this proposal does go through, it would be a significant adjustment for many investors who get into real estate purely to make a dollar.
With all of these proposed changes, it becomes more important than ever to work with an experienced, trustworthy agent. You want someone who will be able to navigate the new measures (should they take effect) and still effectively represent you in finding your perfect home. A good agent knows how to operate within the guidelines of the law while still offering you a high level of service.
CBC has the full list of proposals. Again, nothing is set in stone, but I feel that anything that could potentially slow down the market somewhat can’t be all bad. A 30percent increase in price every year is certainly not sustainable.