Earlier today the Provincial Government introduced the “Fair Housing Plan” which we have attached. In this Plan, the government has not really addressed the real challenge we all have been facing, which is supply. What was addressed was the issue of collecting their fair share of taxes and making a political statement.
The Highlights of the Provincial Plan:
Non Resident Speculation Tax for an individual who is not a Canadian Citizen or permanent resident of Canada – if you fall under this category, you will be taxed 15% in addition to the now current Land Transfer Tax. This tax is not retroactive but applies to any transaction going forward. This measure will impact a very small group of buyers within our industry and will have very little long term impact on our market.
It is important to realize that this speculation tax only applies to residential units from one to six units – excludes commercial and agricultural land.
Actions to Protect Renters:
The government will introduce legislation to cap any rental increase at the rate of 1.5% + inflation. This may impact future investors looking to get into the residential rental investment market.
Provincial government will allow municipalities to impose a vacancy property tax on residential units. The intention of this Vacancy Tax would be to increase resale supply and to add to the rental pool of housing stock – only time will tell.
The Provincial Government has indicated their concern with the practice of contract assignments. Look for the government to implement plans upcoming to deal with tax avoidance through Canada Revenue Agency.
The Provincial Government has indicated their willingness to work with the Real Estate Industry to ensure fair representation for consumers. We at RE/MAX Hallmark have already introduced policy directives concerning “double ending” and fair representation at the offer table and encourages this measure by the government.
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For questions, Please contact me.