Ford government boosts foreign homebuyer tax to 20%, applying it provincewide

Ontariois increasing a tax on non-resident homebuyersto 20 per cent and expanding it to cover the whole province.

The government said the changes set to take effect Wednesday are part of its action plan on housing.

"Our government is working to increase supply and help keepcosts low forOntariofamilies and homebuyers, not foreign speculators looking to turn a quick profit," Finance Minister Peter Bethlenfalvy said in a written statement on Tuesday.

Bethlenfalvy said lack of housing supply and rising costs have put home ownership out of reach for too many families. He called thegovernment's non-resident speculation tax "the most comprehensive"in Canada.

The tax first introduced in 2017 had previously been set at 15 per cent, and only applied to homes purchased by foreign nationals,foreign corporations and taxable trustees in the densely populated Greater Golden Horseshoe region in southernOntario.

NDP, Greens had previously called for the move

The Opposition New Democrats and Greens had both called for the homebuyer tax to expand provincewide and increase to 20 per cent.

Also on Tuesday,Ontariosaid it would eliminate "loopholes" in rebates offered to some residents affected by the tax.

Foreignstudents enrolled in full-time studies for at least two years afterthe purchase and foreign nationals who continuously worked full-timeinOntariofor a year after purchase will no longer be eligible forrebates.

Rebates and other exemptions for new permanent residents of Canada will still be available, the province said, including "anopportunity for foreign nationals studying and working inOntario who become permanent residents of Canada to apply for the rebate.

"The province said it is focusing "relief eligibility to only newcomers who commit to laying down roots in the province long-term."

Homepricestripled in past decade, report finds

A Tuesday news release said the province is looking at other possible measures aimed at land speculation issues like constructionslowdowns "that may be artificially driving up prices of newhomes."

It said the province is also working with municipalities on establishing a vacant home tax. The City of Toronto has alreadyintroduced such a tax, and other municipalities are on the verge of doing so.

The province said it intends to set up a working group with municipal representatives to share best practices on the idea.

A recent report from a task force that studied the housing affordability inOntariofound that house prices inOntariohave tripled over the past decade, outpacing income growth.

At the same time, the report found the province is 1.2 million homes short of the G7 average, leading to issues with workerrecruitment and retention due to lack of housing.