Even to those people who do not actively follow the market, it is no secret that home prices in Ontario are at a historic high. There is much debate over whether there is a real estate bubble, or if the increase is sustainable. However, most people agree a little bit of the air needs to be let out of the market. A proposed new tax is one possibility.
There are many sources of fuel on the fire that is the Toronto real estate market, but one of the largest might be speculation. Many people invest in real estate to try to turn a profit on an eventual resale. Some people believe property investors may be responsible for the large number of dwellings that remain empty most of the time.
Numbers from the most recent census indicate there may be as many as 65,000 unoccupied residences in Toronto. Empty homes can artificially inflate a market by limiting the supply available for people actively seeking a new home. The municipal and provincial governments have begun consideration of a special tax on vacant dwellings to try to reduce the appeal of speculative purchases. As of 2017, owners of empty homes in Vancouver pay a supplementary tax of 1 percent of the home’s value.
The nature of the market is in a constant state of change in Ontario. Any person looking to buy residential real estate needs to stay on top of new developments to ensure the purchase goes smoothly. A skilled lawyer will be able to review a real estate deal and inform the prospective buyer of any surprises that might be waiting.
Source: Toronto Star, “Toronto, province eye vacancy tax on unoccupied homes and rentals“, Tess Kalinowski and Robert Benzie, March 30, 2017