The Ontario government has made changes effective March 30, 2022, to the non-resident speculation tax, as part of the action plan on housing. The intent is to increase supply for Ontario residents and discourage foreign speculators looking to turn a quick profit.
- The tax for foreign homebuyers has been increased to 20 percent.
- A loophole has been closed that allowed foreign students and workers to get a tax rebate on real estate purchases.
- Rebates and other exemptions will still be available for students and workers who become permanent residents of Canada.
- The tax has been expanded to cover all residential properties across the province.
The tax was introduced in 2017 and was set of 15 per cent, and only applied to homes purchased by foreign nationals, foreign corporations, and taxable trustees in the Greater Golden Horseshoe region in southern Ontario.
Real estate experts say Ontario’s decision to increase and expand the foreign buyer’s tax won’t do much to cool the province’s hot real estate market. Recent data from Canadian Housing Statistics Program shows foreign ownership of residential properties at 2.2 per cent in Ontario in 2020. The small increase in the tax is unlikely to deter those who view Ontario real estate to be a safe haven for their money.
As of April 7, the federal government is proposing an outright ban for the next two years on foreign purchasers as part of the 2022 budget.
- Ban on Foreign Buyers to Be Included in Federal Budget: Reports (Storeys.com April 6, 2022)
- Ontario raises foreign homebuyer tax, makes it provincewide (Global News March 29, 2022)
- Changes to foreign buyers tax unlikely to quell Ontario market, real estate experts say (Global News March 30, 2022)