The Ontario government is going ahead with a hike and expansion of its tax on foreign homebuyers.
In a release Thursday afternoon, the government said it will hike the non-resident speculation tax as of March 30 to 20 per cent from the current rate of 15 per cent. At the same time, it will expand the tax to apply province-wide, whereas it is currently only in force in the Greater Golden Horseshoe Region.
The announcement confirms a BNN Bloomberg report in December that the measures were under consideration. At the time, a senior provincial government source indicated Queen's Park was prepared to take matters into its own hands if the federal government didn't honour a campaign pledge to crack down on foreign buying activity, including a two-year ban on home purchases by foreign buyers. However, the federal government hasn't provided details on implementing that pledge.
Since then, home prices in the Greater Toronto Area have marched higher amid a persistent supply crunch that propelled the average selling price to a record of $1,334,544 in February.
In the release Tuesday afternoon, Ontario Finance Minister Peter Bethlenfalvy said the province was moving forward with its expanded and increased tax to deter "foreign speculators looking to turn a quick profit."
The government said it will provide relief from the non-resident speculation tax to newcomers who "commit to laying down roots in the province long-term" and it pledged to work with municipalities that are planning to establish a tax on vacant homes.