MARKET UPDATE FOR THE WEEK ENDING FEBRUARY 19TH, 2021
More than two-thirds of Toronto condo investors are planning to sell their properties rather than pay the new vacant home tax, according to a new Toronto Regional Real Estate Board (TRREB) report. Toronto City Council voted to create an implementation plan for a vacant homes tax in the city which would take effect sometime in 2022. The tax would encourage owners to sell or rent out their vacant properties, which would increase housing supply, the City of Toronto said in a news release. Those who do not would need to pay the tax, and proceeds would go toward building new housing supply.
A total of 40 % of those polled at the end of last year said that they intend to sell their investment property in the next year in part due to a prospective vacancy tax, as well as further restrictions on Airbnbs. TRREB has been up front in asking the City to be prudent with its implementation of the tax, calling for exemptions for snowbirds, U.S. citizens, commuters, and other groups.
Using data from Vancouver’s implementation of a vacant home tax as an example, if one per cent of Toronto’s housing stock is vacant, at a tax rate of one per cent on the average Toronto home’s current assessed value, this could equal $55 million to $66 million in tax revenue per year. Toronto’s tax rate will be determined in the tax development process. Determining how a home is deemed vacant will be part of the tax development process, but residential property owners would be required to make a declaration each year about the occupancy status of the home.
On another subject, TRREB is applauding Toronto City Council for listening to the concerns we expressed and has decided to NOT implement an increase to the Municipal Land Transfer Tax on homes priced over $2 million. Had it been approved the portion of the property value over $2 million would have been subject to a 3.5% land transfer tax rate, up from 2.5% - a 40% increase.
Bosley Real Estate Ltd. is a full-service boutique brokerage operating in Toronto, Muskoka, Niagara-on-the-Lake, Port Hope and Cambridge, Ontario since 1928. We have three centrally located offices in Toronto and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.
HERE ARE THE TOP FIVE TRENDING STORIES OF THE WEEK:
Toronto area real estate is ‘back to full-on madness
“With a severe contraction in the number of houses for sale in Toronto and surrounding cities, anxious buyers have been lobbing money at the few properties that do arrive on the market.”
Homebuying Intentions Soar As Canadians Redesign Their Lives For An Era Of Remote Work
“The share of renters who are planning to buy has quadrupled, and what they want to buy is changing.”
Your House Makes More Than You Do”: Ontario Home Prices Outpacing Household Incomes
“Housing has been costly throughout most of the province for some time now, with the lack of supply helping drive prices higher, and now it appears that the growth in home prices (and this should surprise no one) is outpacing household income growth.”
Suburbs lead the way in housing completions as starts also climb: CMHC
“The suburbs surrounding Toronto, Montreal and Vancouver’s are fueling an uptick in homes beginning construction and properties ready for occupancy, says Canada Mortgage and Housing Corp.”