THE Ontario government has said that it is raising the real estate speculation tax for foreign buyers from 20 per cent to 25 per cent under a plan to tackle a housing crisis in Canada's most populous province.
"For too many Ontarians, including young people, newcomers and seniors, finding the right home is still too challenging," provincial Housing Minister Steve Clark said in a statement on Tuesday (Oct 25).
Ontario, home to Canada's financial capital of Toronto, is projected to have more new households than new homes by 2030, said Canada's national housing agency.
The 25 per cent tax rate would be applicable across the province. It is designed to discourage foreign speculation in Ontario's housing market, the provincial government said.
The government's housing plan also includes proposals to freeze, reduce or exempt fees associated with new home construction, as well as allowances for up to three residential units to be constructed on some land zoned for single homes.
Housing prices surged more than 50 per cent during the Covid-19 pandemic, driven by low interest rates, a desire for more space and speculative activity.
Although home prices are softening after sharp increases in interest rates by the Bank of Canada, higher mortgage qualifying rates are still keeping some would-be-buyers out of the market. REUTERS