Ontario is ready to raise a foreign homebuyers tax in case the federal government doesn’t start acting

According to BNN Bloomberg, the Ontario government will start acting by increasing its tax for non-resident homebuyers in case the federal government doesn’t fulfil its campaign promise to reduce foreign buying activity.

“Ontario is ready to raise the Non-Resident Speculation Tax (NRST) to 20% and expand its validity area beyond the Greater Golden Horseshoe,” – noted a senior Ontario government source, adding that the tax may exceed even 20% in time.

“By increasing the validity area and including the entire province, by raising the tax, we will constrain foreign speculation and make sure our restrained housing supply will go to those who need it the most.”

As you know, Ontario foreign homebuyers tax of 15% was introduced in April 2017.

The Greater Golden Horseshoe includes regions to Barrie to the north, Niagara to the south, and stretches from Waterloo to Peterborough on a west-east basis.

During its election campaign, the federal Liberals promised to ban foreign home purchases in the country for 2 years. However, we haven’t heard anything about it since they were re-elected in September.

At the same time, the GTA home prices hit an all-time high for the third month in a row in November, while rural regions are also facing sharp prices growth.

BNN Bloomberg source says the Ontario government will study the details on the federal government’s plan when Deputy Prime Minister and Finance Minister Chrystia Freeland provides the economic and fiscal update this week, and warned that if there’s no information about ban implementation, the province will start acting at the beginning of 2022.

In addition to it, the source noted that Ontario would be ready to tighten exemptions from the non-resident speculation tax, especially in case of foreign students and international workers.