City council could ask province to impose home speculation tax in response to soaring real estate market - CP24 Toronto's Breaking News | Canada News Media
Toronto City Council will consider asking the provincial government to introduce a home speculation tax during a meeting this week, as it continues to look for new ways to rein in the city’s soaring home prices.
The idea was first proposed by Eglinton-Lawrence Coun. Mike Colle during the December meeting of city council before being referred to Mayor John Tory’s executive committee for further consideration.
At a meeting scheduled to begin tomorrow, councillors will have the final say on whether the city will formally ask Queen’s Park to implement a “home Speculation and home flipping tax” locally.
It is not immediately clear what form such a tax could take, however in his original motion Colle referenced a 50 per cent land speculation tax that was “credited with slowing the extreme increase in property values in Toronto in the 1970s.”
“If you look at the foundation of all the policies we’ve adopted in terms of trying to improve the availability of housing, including affordable housing, a lot of it has been with a view to placing first the notion that people are to live in homes and homes or for people to live in,” Mayor John Tory told reporters during a briefing at city hall on Tuesday. “Homes are to invest in as well but you can never let the financial aspects of this surpass the obligation that we have to find more homes for more people to live in, hopefully as affordably as possible. So it is something that I think is a worthwhile signal for us to send as a city council given the challenge we face in terms of finding housing for people in our city.”
Real estate prices in Toronto have soared since the onset of the pandemic with the average price across all residential property types hitting a peak of $1.095 million at the end of 2021.
The city’s real estate board has in the past spoken of a need to increase supply to bring housing prices under control but in a letter sent to Tory’s executive committee last month it warned that a speculation tax “could primarily impact small-scale mom and pop investors who also happen to be a key source of supply.”
“TRREB strongly believes that public policy targeted at the housing market should be evidence-based. In this regard, it is not clear that another speculation tax on the sale of non-principal residences will have any sustainable benefit with regard to housing affordability, and in fact, could create numerous unintended consequences that would cause new challenges for homeowners, buyers, and renters,” TRREB President Kevin Crigger said in the letter.
Toronto city council does not have the authority to impose a house speculation tax on its own and would need the provincial government to pass legislation putting such a tax in place.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
