The Ontario Green Party is proposing a tax on home buyers with multiple properties as a measure to reduce demand for housing and make it easier for first-time buyers to enter the market.
Party leader Mike Schreiner announced the campaign platform’s promise on Wednesday, saying young people are being judged by the market and accusing the current Progressive Conservative government of letting speculation “get out of hand”.
“It’s time to level the playing field and remove the red carpet that (Prime Minister) Doug Ford opened for wealthy speculators, so that first-time homebuyers have a chance,” Schreiner said.
If elected in June, the Greens – who currently hold one seat in the Ontario legislature – will impose a 20 per cent tax on the purchase of a third home. The amount would increase with each additional property.
It will only apply to new home purchases from home or corporate buyers who already have two or more homes. The Greens are also proposing a tax on vacant homes.
The spike in housing prices and the lack of supply will probably be major issues in the upcoming campaign for the provincial elections.
Statistics Canada shows that multi-property ownership accounted for 31 percent of Ontario housing stock in 2019 and 2020, and multi-property owners accounted for 16 percent of all landlords in the province.
Cody Skrzypkowski, a senior associate of Toronto-based North Group Real Estate with North Group, said the Greens’ proposal would probably even help first-time buyers on the pitch, while provoking mixed reactions from others.
“I think it will make a lot of people happy and I think it will make a lot of people very frustrated,” he said. “I think there will be a lot of repulsion in this, because at the end of the day, a lot of people have made a fortune through this boulevard.”
Third-party home buyers are unlikely to be a “mass market segment,” said Skrzypkowski, who works primarily with people buying first- or second-class property, but “certainly influences a specific buyer demographic.”
Several Canadian governments, including the Tories of Ontario and the Federal Liberals, have already targeted foreign buyers in offers to cool the housing market.
The Ontario government recently increased an existing tax on home buyers from non-residents to 20 percent from 10 percent, expanded it to cover the entire province, and tightened the gaps that exempted some foreign nationals living in the province.
This month, the federal government’s budget included a two-year ban on buying housing with foreign capital.
Taxes on home buyers are less common in Canada, with the exception of measures recently introduced in Nova Scotia’s spring budget for taxing property owners outside the province.
Paul Anglin, a professor of real estate at the University of Guelph, said international buyers are a “convenient mouthful” when it comes to housing, but that taxation may not be effective as they do not own most homes. in the country.
“I think all the data shows that it is a very small percentage, so if you want to have an effect, you have to influence most of the market. “That means domestic buyers,” Anglin said in an interview.
Even so, Anglin said the focus of governments and political parties on real estate investors is probably misplaced when it comes to changing housing prices because. Such laws do not necessarily address the lack of housing for people seeking a place to live in the countryside, he said.
“My suggestion is to act on the supply side. “Increase the number of houses being built,” he said. “If you really want to reduce the competition that raises the price, you have to get more homes for the same number of people.”
This Canadian Press report was first published on April 27, 2022.
– With files from Tara Deschamps.
