Toronto mayor jumps into real estate policy debate

Toronto mayor jumps into real estate policy debate

Toronto mayor jumps into real estate policy debate And provides his own idea about how to best manage the city’s escalating real estate prices.

Foreign buyer tax.

Capital gains tax.

Tighten access to credit.

Build more homes.

We could keep going, but you get the gist; there have been several potential policies floated that could address the seemingly impossible trajectory of Toronto housing prices and, therefore, affordability.

Well, you can now add vacant house tax to the growing list.

That appears to be Mayor John Tory’s preferred method.

“Vancouver recently implemented a vacant home tax,” Tory said Thursday, following a roundtable housing discussion with industry experts. “And I am open to exploring whether this would be the right measure for Toronto.”

Although there is a lack of sufficient data, Tory estimates there are around 65,000 vacant homes in the city.

And those vacancies are increasingly on the industry’s radar.

“A woman reached out to me and said, ‘what about a vacancy tax? There are 50 vacant units in my building that aren’t taxed,’” Carl Langschmidt, president of Condos.ca, said. “I never thought Toronto needed a vacant tax like Vancouver … I didn’t think it was so much of an issue, but some people on the ground are reporting a fair amount, though not as much.”

Vancouver’s vacancy tax went into effect January 1.

The policy requires homeowners to lease their units for at least six months this year; failing to do so will result in a 1% tax on the home’s assessed value.

“The goal of the Empty Homes Tax is to increase rental housing supply during a time of unprecedented low vacancy and high costs,” Kathleen Llewellyn-Thomas, general manager of community services for the city of Vancouver, said earlier this month. "We are encouraging homeowners to become landlords rather than pay the tax. But they must take action or face a significant tax bill."


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Foreign property tax will have no effect on affordability
9 Comments
  • Carlos Henao - Mortgage Teacher 2017-03-31 9:35:21 AM
    I don't understand how this could be implemented. How would they find out which units are vacant? Are they going to demand that every unit in the GTA prove either the primary owners live there, or that there is a lease contract? Are they going to demand bank statements showing rent payments being deposited?
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  • Arbella Dooman 2017-03-31 9:44:23 AM
    They want to ck Hydro and water usage.
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  • Murray Snedden 2017-03-31 10:55:18 AM
    A more balanced Landlord Tenant Act may be another way to encourage potential Landlords to bring vacant space to market. Landlords take on significant risk with limited ability to obtain any form of security and going to the Rental Tribunal proves unsatisfying at best. Taking on all the risks that come with being a Landlord is not worth the risk for most. It is also insulting when the policymakers that created this mess propose to gain from it with a vacancy tax. How about some less politically motivated policy with some longer term thinking - find a policy balance that encourages all participants to play. It is not all investors sitting on newly built vacant condos, there are lots of potential basement apartments, etc. within existing homes. There is no question there is a source of rental housing supply that can be released, however the punitive approach is unlikely to achieve the desired result.
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