Oct 25 (Reuters) – The Ontario government said on Tuesday it was raising the real estate speculation tax for foreign buyers from 20% to 25% as part of a plan to tackle the housing crisis in Canada’s most populous province.
“For too many Ontarians, including young people, newcomers and seniors, finding the right housing is still too difficult,” provincial Housing Minister Steve Clark said in a statement.
Ontario, home to Canada’s financial capital, Toronto, is expected to have more new households than new homes by 2030, according to Canada’s national housing agency.
The 25% tax rate would apply across the province and is intended to discourage foreign speculation in Ontario’s real estate market, the provincial government said in the release.
The government’s housing plan also includes proposals to freeze, reduce or waive fees associated with building new homes as well as allocations for up to three residential units to be built on certain land zoned for single-family homes.
House prices jumped more than 50% during the COVID-19 pandemic, driven by low interest rates, a desire for more space and speculative activity.
Although home prices are easing after steep interest rate hikes by the Bank of Canada, higher qualifying rates are still keeping some potential buyers out of the market.
To curb speculation, the federal government also implemented a temporary ban on foreign buyers starting in January.
Reporting by Ismail Shakil in Ottawa; Editing by Josie Kao
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