affordable rentals Archives

Next week’s executive committee meeting is gearing up to discuss sweeping changes to housing in Toronto.

Mayor John Tory recently proposed phasing out the vacant commercial and industrial tax rebate program that gives businesses that are sitting empty a tax rebate. The tax rebate program, which has been in place since 2001 offers unoccupied commercial properties a 30 per cent tax rebate and industrial properties get 35 per cent. The program requires owners to try and rent the space, but does not provide a time limit on how long a business owner can receive the rebate. A city report revealed the program has given more than $367 million in subsidies to property owners, much-needed revenue that could be better spent elsewhere.

The proposal that will be discussed at next week’s meeting recommends the city lower the tax incentive to 15 per cent, beginning on July 1, 2017 to June 20, 2018, and then permanently shut down the rebate program on July 1, 2018. The report also recommended the rebate expenditures be reinvested in job growth programs and the poverty reduction strategy. This decision has been widely embraced by the city because poverty reduction is in dire need of funds in Toronto, and promoting businesses to stay empty is bad business after all. The rebate program has been criticized in the past because it allowed property owners to sit on their vacant stores while the value of the location increased. This has left several stores empty and little available business real estate in Toronto.

The executive committee also plans to focus on rental affordability in Toronto. Recently the province has put forward a bill on rental control, and has indicated that municipalities will be able to implement it at will. City council is moving forward with this initiative and will discuss how to implement rental control with a specific provision to have the rent control tied to the unit and not the tenant. There will also be an update on inclusionary zoning and laneway suites in Toronto.

The city is taking sweeping steps to respond to the high-pressure housing crisis in Toronto. By removing the tax rebate to empty businesses, it incentivizes business owners to fill their storefronts and reallocates much-needed funds to poverty reduction. Moving forward with rent control, inclusionary zoning and changing the regulations around laneway housing are all necessary to make Toronto a more liveable city. The outcome of the meeting will be interesting indeed, and will set up for a sure-to-be exciting May City Council.

Buying an affordable house in Vancouver is often compared to living in the land of unicorns and leprechauns, but B.C’s new legislation may help make this far-away dream a reality once again.

British Columbia Premier Christy Clark announced a one-time 15 per cent tax on Monday, July 25 in Vancouver that would apply to foreign investors who are neither Canadian citizens, nor permanent residents, in an effort to cool the housing market. The new legislation applies to residential real estate in Metro Vancouver, from Bowen Island to Maple Ridge and Langley, and begins on Aug. 2.

With the new foreign tax, a $2 million home in Vancouver would accumulate an additional $300,000 if purchased by a foreign buyer. If a foreign buyer purchased a home for $10 million, this tax would raise to $1.5 million. On the other hand, if a foreign buyer tried to avoid the tax, “anti-avoidance” measures would be put in place that include $100,000 for individuals and $200,000 for corporations that don’t comply to the legislation.

The funds raised by the new tax will be put towards a new housing priority initiatives fund for provincial housing and rental programs that is set to be launched in the near future. This fund will receive an initial investment of $75 million from the government and then begin to accumulate revenues from the tax on foreign buyers.

In order to obtain the necessary information on buyers in Vancouver, Clark also announced the Real Estate Services Act, which officially ends the real estate board’s self-regulation or ability to govern itself. The government’s involvement in the industry will allow them to access information on buyers to see what homes will be charged the foreign tax. Finally, the province will also introduce a vacancy tax that targets empty rental homes of foreign investors to increase the number of available rentals.

There are possible issues with the foreign tax, though the response from B.C home buyers has been overwhelmingly positive. Investors could potentially avoid the tax by getting family members to purchase properties, highlighting a loophole in the legislation that relies on buyers reporting their nationality honestly. The tax may also hurt international recruitment because new immigrants won’t be able to purchase property tax-free until they are permanent residents or Canadian citizens.

Toronto’s housing market has skyrocketed and a foreign tax in Canada’s largest city would cool the hottest housing market in the east as well. Ontario Financial Minister Charles Souza reported he is looking at implementing a similar law in Toronto. Hopefully Toronto will follow Vancouver’s lead and take necessary steps to implement a foreign tax and cool the housing market for local buyers. The outcome of the foreign tax remains to be seen, but any effort to lower housing prices and give people access to homes is a step is a good move.

affordable rentals

Toronto to end commercial tax rebate, adopt rent control

B.C implements foreign tax on housing in Vancouver