Ontario raising foreign homebuyer tax to 25%

Ontario has announced it is raising the non-resident speculation tax on homes purchased by foreign nationals from 20 per cent to 25 per cent, effective Tuesday.

Finance Minister Peter Bethlenfalvy says the move makes Ontario’s tax rate the highest in Canada and seeks to discourage foreign speculation.

“Young families, newcomers and those all over the province dream of having their own home, a dream which continues to be out of reach for too many,” Bethlenfalvy said.

“To help Ontario homebuyers, our government is increasing the Non-Resident Speculation Tax rate by another five percentage points to 25 per cent, making it the highest in Canada, to further discourage foreign speculation in Ontario’s housing market.”

The Progressive Conservative government previously increased the non-resident speculation tax from 15 per cent to 20 in March and expanded it to cover the whole province instead of just the Greater Golden Horseshoe area of southern Ontario.

Municipal Affairs and Housing Minister Steve Clark is also set to introduce a piece of housing legislation Tuesday, as the government sets out to hit a target of 1.5 million homes being built in 10 years.

“Today’s announcement is another step in our government’s plan to make housing more attainable for all Ontarians,” Clark said.

“We are working to end Ontario’s housing supply crisis — both by building 1.5 million new homes over the next 10 years and by ensuring Ontarians are able to access our existing housing supply. These measures are a clear indication of our commitment to do precisely that.”

The government’s previous housing bill was one to give the mayors of Toronto and Ottawa so-called strong mayor powers that would allow the heads of those cities to veto council votes that conflict with building housing.

Ontario’s budget this year showed that the non-resident speculation tax was projected to bring in $175 million in this fiscal year.