Non-Resident Speculation Tax Helping Address Unsustainable Demand
Ontario’s non-resident speculation tax (NRST) is helping to address unsustainable demand in the Greater Golden Horseshoe while ensuring Ontario continues to be a place that welcomes all new residents, as new data shows that home purchases by buyers who are not citizens or permanent residents of Canada have decreased.
Newly released data from provincially collected tax information shows that individuals who are not citizens or permanent residents of Canada, or foreign corporations, accounted for 3.2 per cent of home purchases across the Greater Golden Horseshoe Region, down from 4.7 per cent since the launch of Ontario’s Fair Housing Plan this spring. In Toronto, 5.6 per cent of transactions were made by foreign buyers, down from 7.2 per cent.
Individuals who are not citizens or permanent residents of Canada, or foreign corporations, may be subject to the NRST.
Ontario’s Fair Housing Plan introduced 16 comprehensive measures to make housing more affordable for homebuyers and renters, while bringing stability to the real estate market and protecting the investment of homeowners.
Making housing more affordable is part of our plan to create jobs, grow our economy and help people in their everyday lives.
- Data collected through Ontario’s land transfer tax system shows that foreign transactions (transactions that involved at least one foreign entity) in the GGH represented 3.2 per cent between May 27, 2017 and August 18, 2017, compared to 4.7 per cent between April 24, 2017 and May 26, 2017, a drop of 1.5 percentage points.
- Approximately 3.2 per cent of 66,434 transactions in the GGH between May 27, 2017 and August 18, 2017 involved at least one foreign entity, compared to approximately 2.6 per cent of 101,698 transactions over the same time period in Ontario overall.
- As of April 24, 2017, the Province began collecting enhanced information to better understand trends in Ontario’s local housing markets. This additional requirement applies to anyone who purchases or acquires land containing up to six single family residences or agricultural land.
- As per the Toronto Real Estate Board, the average selling price for all home types combined was $732,292 in August 2017 – up by three per cent compared to August 2016.
- As per the Canadian Real Estate Association, Ontario home resales declined five per cent in July from the previous month while average prices rose 0.5 per cent.
“The measures that we introduced as a part of the Fair Housing Plan are working—we are seeing increased housing supply and evidence that more people are finding affordable homes. Ontario continues to be a place that welcomes all new residents, drawn by its rising employment and strong economy.”