Tax rises! The City of Toronto may follow the example of Vancouver to collect property vacancy tax

With the raging epidemic in Toronto, the situation seems to be getting worse, and there seem to be some new changes in the Toronto housing market. First of all, Re/MAX Real Estate Corporation predicts that the Canadian housing market outlook report on Tuesday (December 1) predicts that Toronto housing prices will rise by another 6% next year. Data shows that the average house price in Toronto rose 12% year-on-year in the first 10 months of this year. From the beginning of the year to the end of October, the average house price in Toronto was as high as 910,000 Canadian dollars, which is a full 100,000 Canadian dollars higher than last year. According to Re/MAX’s forecast, house prices will rise to around 970,000 Canadian dollars next year. The report believes that the 905 suburbs (such as Mississauga, Hamilton, and Niagara Falls) and some nearby small towns, due to the large number of buyers upgrading to large houses and the influx of urban buyers, the price increase is estimated to be even sharper. Both the sales and prices of condominiums in the city center have fallen this year. It is estimated that the bottom will be reached by the end of next year. With the influx of immigrants and international students and the increase in housing demand, condominiums in the city center will once again become a hot spot for investment. The price of detached houses in urban areas is too expensive, even if the interest rate is extremely low, they cannot afford them. If you want to buy a house in an urban area, you can only buy apartments. But if the government continues to block the economy and more landlords cannot get much financial support, more houses will be sold on the market.

The report also pointed out that starting from February, home prices in Mississauga and Brampton in the Greater Toronto Area have increased by 15.7% and 14.9% year-on-year, respectively, and are expected to rise by 4% and 5% respectively next year. Oakville house prices rose 13.9% year-on-year over the same period and are estimated to rise another 5% next year. Prices outside of Greater Toronto are estimated to rise between 7% and 12% next year. According to reports, in the first 10 months of this year, the average house price in Windsor rose 21% year-on-year to 4.0649 million yuan, Ottawa rose 19.2%, Waterloo and Lake Muskoka rose 18.9% and 20.3% respectively.

On the other side, the Toronto Executive Committee report recommends that the City of Toronto implement a property vacancy tax to increase housing supply. The report also pointed out that the purpose of the proposal is to target owners who have left their properties vacant or have not rented out their properties for at least 6 months within a year. Toronto Mayor Zhuang Deli said that people are encouraged not to leave their properties vacant; the purpose of levying the property vacancy tax is to hope that more properties will be available in the market.

The Toronto Real Estate Commission has been working to keep the data with real estate agents, who are allowed to provide information to their clients. The 2018 ruling allowed consumers to view historical data on a password-protected brokerage website, which allowed them to make their own comparisons without asking for data from real estate agents.

Zhuang Deli also said that he believes that most citizens do not need to pay this tax, such as owners who have to leave their homes due to illness, or live in Florida for half a year, or carry out renovations. ‘You can live in it or you can rent it out. But if you leave it vacant, you need to pay taxes’.

The City of Toronto predicts that with the goal of two years, the cost of starting this plan will be approximately 10 million to 13 million yuan, but it can provide the city government with an annual income of 55 million to 66 million yuan.

After the Vancouver government introduced a property vacancy tax in 2018, the number of vacant properties has been reduced by 25%. According to the Canadian Mortgage and Housing Corporation, and other market data, after the introduction of the property vacancy tax, Vancouver’s 2019 rental units have increased by 5,000. , Of which 3,000 are located in downtown Vancouver. In 2021, the Vancouver government will increase the vacant property tax to 3%.

The Chief Financial Officer and Treasurer of the City of Toronto, and the Executive Director of the Housing Secretariat have also proposed to impose a property vacancy tax. If the proposal is approved by the City Council, it will take effect in 2022.

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