Since March, political debate and discussion in Ontario has been stuck on two points: rent control and the housing market.
Though these are separate issues that involve two different areas of law, they are inextricably linked. Soaring housing prices keep first-time home buyers from entering the market — paradoxically, the high cost of rent drives them to get out and invest in their own home. When both options in an area are unaffordable, people are forced to look elsewhere.
Now, the Ontario Liberals are set to tackle both issues at once. On Thursday, April 20th, Ontario Premier Kathleen Wynne announced a new housing plan with measures intended to cool the housing market and set limits on how much residential landlords can increase a tenant’s rent.
Foreign Buyers Tax
The biggest change comes with plans to impose a 15% tax on home purchases in the Greater Golden Horseshoe area for buyers who are not citizens, permanent residents, or corporations of Canada.
A rebate would be available to people who later get citizenship or permanent resident status, foreign nationals, and international students.
Concurrently, the province will expand rent control provisions to all private rental units in Ontario. The Residential Tenancies Act currently imposes rent control on units constructed or used as a rental unit before November 1st, 1991. That leaves thousands of units, particularly in Toronto, with no limit on how much a landlord can increase the rent once per her.
Following legislative changes, rent increases in all private rental units will be limited to the annual rent increase guidelines.
Other Changes in the Housing Plan
The plan contains 16 measures in total. In addition to rent control and the tax on foreign buyers, the proposed measures are:
- Updating the Residential Tenancies Act, including a standard lease agreement
- Developing affordable housing on surplus provincial land assets
- Allowing municipalities to introduce a vacant homes tax
- Ensuring property tax for new apartment buildings is in line with rates for similar properties
- Funding construction of new rental units through a development charge rebate
- Allowing municipalities to use property tax to encourage development
- Creating a provincial Housing Supply team that will work with developers and municipalities
- Undertaking to identify and tackle other factors contributing to tax avoidance and excessive speculation in the housing market
- Reviewing the rules for real estate agents
- Launching an advisory group to advise the government on the state of the housing market
- Educating people on their consumer rights in real estate deals
- Partnering with the Canada Revenue Agency to ensure people pay the correct federal and provincial taxes on real estate transactions
- Establishing timelines for elevator repairs in residential buildings in consultation with the Technical Standards & Safety Authority
- Requiring municipalities to consider factors like household incomes and sizes in approving high density residential buildings