All three levels of government met Tuesday, April 18th to decide on an action plan that will cool our overheated Real Estate market. Many of the changes will certainly cool our market and shift the weight from a HOT Sellers market to a more balanced market.
What does a balanced market mean? To sum it up, we could see listings on the market for 30 plus days, little presence of multiple offers, more inventory to choose from and more conditional offers versus the firm offers we have recently been used to.
A recently published article by CBC News gives a bit of insight on the new changes:
"The Ontario government has announced what it calls a comprehensive housing package aimed at cooling a red-hot real estate market. Here are the 16 proposed measures":
Actions to Address Demand for Housing
1. A 15 percent non-resident speculation tax (NRST) to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.
Actions to Protect Renters
2. Expanded Rent Control that will apply to all private rental units in Ontario, including those built after 1991, which are currently excluded. (This has been in place for properties built before 1991 for a significant time - all but two of my personal investment properties have been under this rule and it has not negatively impacted my investments whatsoever.) Over the past decade, the increase has averaged two percent and is capped at a maximum of 2.5% annually.
3. Updates to the Residential Tenancies Act to include a standard lease agreement, tighter provisions "landlords own use" evictions, and technical changes to the Landlord-Tenant Board meant to make the process more fair, as well as other changes.
Actions to Increase Housing Supply
4. Leveraging the Value of Surplus Provincial Land Assets. A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.
5. Introduce a Vacant Homes Property Tax. Legislation that would allow Toronto and possibly other municipalities to introduce a vacant homes property tax in an effort to encourage property owners to sell unoccupied units or rent them out.
6. Property Tax for New Apartment Buildings. A plan to ensure property tax for new apartment buildings is charged at a similar rate as other residential properties.
7. A Five-Year, $125-Million Program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.
8. Flexibility for Municipalities when it comes to using property tax tools to encourage development. For example, municipalities could be permitted to impose a higher tax on vacant land that has been approved for new housing.
9. The creation of a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.
10. An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.
11. A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.
12. The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed.
13. Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
14. A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
15. Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.
16. Provisions that would require municipalities to consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes, among other things." - www.cbc.ca
Questions about how any of these new changes could affect you? Don't hesitate to call me directly at 416 706-4400.