You have probably seen all the social media posts and news updates about the Ontario Government getting involved with the real estate market in Ontario. Headlines that mention “Foreign Home Buyer Tax”, “Rent Control”, that have been brought in by the Kathleen Wynne Government.
Wynne says that these measures will make the process of finding and affording a place to live easier. This new tax will affect people who live outside of Ontario and are looking to invest in Ontario real estate – apartment buildings, rental houses, or any investment/place to park their money.
But is more Government involvement really the solution to the rising real estate costs? Are foreign investors the reason for the rising housing costs?
There is no evidence to support either. No data, no facts, nothing. In fact, these same taxes were implemented in Vancouver, B.C. and the only thing that has come out of that is slower home sales, and the home values are still high. A $1,000,000 home from one year ago is still $1,000,000 today. The initial impact was short-lived. Municipal Governments need to issue more building permits and allow higher density developments. The answer to affordability is inventory, not a tax! Let’s face it, 15% foreign investment tax is a joke. They are probably saying “come on….is that all you got”. This will have no impact on home values and foreign investors will continue to buy. Lessons should have been learned in B.C.!