It is a well – known fact that the housing market in Ontario has been increasing rapidly in the last years, that is the reason why the Canadian Government has taken the decision to generate new rules to cool down the real estate market as an integral solution for 2017.
In this scenario, the Government is establishing some mortgage rules that will protect the medium class providing security and economic stability at the time of buying, selling or renting a property.
As for the topic of taxes, in order to reduce the red–hot real estate market, the government seeks to apply a 15 % purchase tax to people that are not permanent residents or that are not Canadian corporations, besides it will apply taxes to the properties that are unoccupied to encourage owners to sell or rent these units.
On the other hand, the taxes for new apartment buildings will be equal to other residential properties; what is more, in partnership with the Canada Revenue Agency, the Government is tightening the requirements for the correct payment of federal and provincial taxes.
Now for rental apartments, the government is going to implement a rent increase limit to all private rental units, including those that were built after 1991 that are currently excluded from any rent increase limit; additionally, the leasing law will be updated to include lease standards with stricter rules to execute evictions and fair changes in landlord- tenant agreements.
Apart from this, the Government is also working in different programs to cool down the housing market by implementing a 125-million dollar program to encourage construction of new rental apartment buildings through a partial rebate of development charges in a 5-year period.
Trying to cover all the angles, the Government is creating new provincial employee working groups dedicated to identifying barriers in specific projects related to housing development besides working with promoters and municipalities to find solutions. Another team that the government is going to organise is the housing advisory group which is going to meet every three months to offer permanent counselling about the situation of the housing market, the impact of the new rules in the system or any other related topic that needs to be addressed.
The Government is also worried about real estate agents and consumers, for that reason, it requires that real estate agents are continually updating their knowledge about housing market rules, besides following a series of steps at the moment of providing their services to consumers that are looking to either rent, buy or sell a property.
The government also stresses the need for consumers to be well educated about their rights, in particular when a real estate agent represents other parties in the real estate transaction.
In relation to the lands owned by the Government, its intention is to leave them available for developers to buy and build more properties increasing the number of housing units (increasing supply) to properly respond to the demand which at the end will help regulate housing prices.
According to the Canadian Government, it is important to establish rules that the municipalities can follow, so that they can consider the correct range of unit sizes in higher density residential buildings so that a diverse range of home sizes and incomes can be accommodated.
Last and related with technical standards and safety, the government indicates that it is important to set up schedules to fix the elevators in a reasonable amount of time while fulfilling all technical and safety requirements.
Stonegate property management one of the apartment management companies Toronto is also seeing rentals increase due to the changes in the real estate market. It seems more people rather rent for now and save money rather than buy. It seems that more Toronto property management companies are seeing and increase right across the GTA.
With the new policies, the government wants to provide municipalities more flexibility to use property tax tools to encourage development. With these set of new regulations, we can see that the government is making an effort to understand and solve issues that are contributing to the excessive speculation in the real estate market that we are currently seeing.