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Our team has received numerous calls today regarding the 16-point plan implemented by the Ontario Government to cool the housing market.

The most pressing question we are being asked is regarding the 15% Non-Resident Speculation Tax (NRST) and the implementation details/timing.  The detailed Technical Bulletin published by the Ontario Ministry of Finance can be access through the attached link ( Non-Resident Speculation Tax Technical Bulletin) and states the following:

NRST Effective Date

• “Upon the enactment of legislation, the NRST will be effective as of April 21, 2017
• Binding agreements of purchase and sale signed on or before April 20, 2017 are not subject to the NRST.”

While you should check with your lawyer to confirm the specifics, it appears that any binding agreements entered into on or before today will not be subject to the new tax.  If there are a significant numbers of non-resident speculators sitting on the fence, this potential one day of opportunity could lead to a record number of sales closing on April 20th, 2017.

Details of 16-Point Plan:

As noted, the Ontario government has introduced a 16-point plan to try and control the real estate market.  A summary of the 16 point can be found below, and the details can be accessed at the following Ontario Government Link (https://news.ontario.ca/mof/en/2017/04/ontarios-fair-housing-plan.html)

1. Implement a new 15% Non-Resident Speculation Tax (NRST)
2. Expand rent control to all private rental units (with “an increase capped at 2.5%”)
3. Introduce changes to the Residential Tenancies Act – including standardized leases
4. Create new market housing and affordable-housing units with surplus provincial land
5. Empower the City of Toronto “and potentially other interested municipalities” to introduce a vacant homes property tax
6. Making sure multi-residential apartment buildings are charged property taxes at similar rates to other residential properties
7. A $125-million program over five years “to further encourage the construction of new rental apartment buildings”
8. Giving municipalities “flexibility” to use property taxes to fuel development
9. Creating a “Housing Supply Team” to identify obstacles to housing developments and work with developers and municipalities to address them
10. Working to “understand and tackle” real-estate practices that allow “paper flipping,” which includes using assignment clauses for real-estate speculation
11. Reviewing rules for real-estate agents to “ensure that consumers are fairly represented”
12. Establishing a “housing advisory group” to advise the government on the housing market and the effects of the newly announced changes
13. Educating consumers on their rights in real-estate transactions
14. Partnering with the Canada Revenue Agency to strengthen reporting requirements and make sure taxes are paid on real-estate purchases and sales
15. Overhauling standards for elevator repair
16. An updated Growth Plan with municipalities to address density and “an appropriate range of unit sizes”

(note a number of the above numbered points are courtesy of Tom Cardoso and Evan Annett in their recently published article in the Globe and Mail.  A link to that article is included in the below list)

While additional information will undoubtedly be circulated in the coming day, the most helpful articles we have found on the subject thus far are included below:

• http://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-slaps-15-tax-on-foreign-buyers-expands-rent-control-in-16-point-plan-to-cool-housing
• https://beta.theglobeandmail.com/real-estate/toronto/ontario-housing-16-big-changes-explained-in-charts/article34757648/?ref=http://www.theglobeandmail.com&service=mobile
• http://business.financialpost.com/news/property-post/ontarios-16-point-plan-to-cool-torontos-red-hot-housing-market