Province's tax rate now the highest in Canada
The Ontario government has raised the non-resident speculation tax on homes purchased by foreign nationals from 20% to 25%, making it the highest in Canada.
Finance minister Peter Bethlenfalvy said the hike is meant to help Ontario homebuyers break through the province’s competitive housing market by discouraging further foreign speculation.
The government increased the non-resident speculation tax from 15% to 20% last March as part of a larger plan to solve the housing crisis in the province. It also expanded the tax to apply provincewide, when it previously only applied to homes purchased in the Greater Golden Horseshoe region of southern Ontario.
“Today’s announcement is another step in our government’s plan to make housing more attainable for all Ontarians,” said Steve Clark, minister of municipal affairs and housing. “We are working to end Ontario’s housing supply crisis – both by building 1.5 million new homes over the next 10 years, and by ensuring Ontarians are able to access our existing housing supply. These measures are a clear indication of our commitment to do precisely that.”
Last week, the government also announced that it is looking to double fines for unethical and illegal new home cancellations through the New Home Construction Licensing Act, which would raise existing maximum financial penalties to $50,000 per infraction if passed.
Ontario’s non-resident speculation tax was projected to bring in $175 million this fiscal year, according to a report by The Canadian Press.