Ontario urging Ottawa to change tax rules in bid to curb real estate speculation

by The Canadian Press20 Mar 2017
Ontario Finance Minister Charles Sousa is urging Ottawa to address speculative investing in the country's housing markets by changing how such profits are taxed.

Currently, capital gains tax is charged on 50 per cent of the profits on the sale of a home, unless the property qualifies for the principle residence exemption.

In a letter to federal Finance Minister Bill Morneau on Friday, Sousa says that boosting the taxable amount above 50 per cent could reduce the incentive for people to purchase homes on speculation. Morneau is set to release his latest budget on Wednesday.

Speculative investing in the real estate market _ buying a home in the hope of turning a profit rather than to live in _ is believed to be one of the culprits behind soaring house prices in certain markets including Toronto and Vancouver and their surrounding areas.

Sousa says curbing speculative real estate purchases could help address dwindling housing affordability so that first-time buyers are able to get into the market.
Such a measure could also generate tax revenue to put towards other housing affordability initiatives, he adds.

``My primary focus is to address the concerns of middle class Canadians who are worried about buying their first home,'' the letter reads.

``Additionally, it is important that the housing market remains stable, meaning that borrowers and lenders are resilient and able to withstand economic shocks.''


The Canadian Press

COMMENTS

  • by Jon 3/20/2017 5:07:48 PM

    So to relieve the pressure on the Toronto housing market due to low inventory, the solution is to prevent investors from selling surplus or investment property, thus keeping inventory off the market. Brilliant.

  • by Henry Timmins 3/20/2017 5:25:25 PM

    The Government is here to help.....with a nonsense action that affects a very small percentage of the participants. But to be fair, capital losses must be treated the same when the market turns south.

  • by PS I work in RE 3/20/2017 5:36:16 PM

    Actually what they left out or didn't explain is that they are trying to up the taxes on "Flippers" - those who buy pre-sale condos and never live it the suite nor was it ever leased, as well as people (like in Scarborough) buy a house, renovate, never live in it or rent it out and sell it (less than 1 year) . If you look, I will continue to use Scarborough for example- houses were bought in 2016, completely renovated and the owner never moved in or rented it and sells for a huge price. Then theres is this part-when an agent gives a CMA they are not to tell a seller a price they are to suggest a spread - lower and upper price - But this not being done either - It is unethical for an Agent to suggest a price well below the current market value - like the house listed in the east end @$599,900 and the almost the same house next door (neither renovated) brought $850,000 - the 1st house @$599,900 was obviously grossly under listed - TREB,RECO and OREA need to get on this unethical practice - it both the Sales Reps and the sellers - Rules and Regulations are not being upheld... Even thought TIm Hudak says not non residents-Money is being filtered in the from Asia & other countries outside of Canada - Yes there is a lot- Son/daughter student- parents transfer money to them and then buy- This can be traced through FINTRAC easy everyone has to complete it, 1 for any transfer/deposit over $10,000 in a bank and for all Real Estate Sales Transactions both sides

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