The Ontario government is increasing the foreign homebuyer tax from 15 per cent to 20 per cent, to help first-time homebuyers and crack down on tax avoidance.  The new rate takes effect on March 30, 2022, and will expand across the province.

Currently, the non-resident speculation tax only applies to homes purchased in the Greater Golden Horseshoe Region by foreign nationals, foreign corporations and taxable trustees.

Plans are to focus NRST relief eligibility to only newcomers who commit to laying down roots in the province long-term.

Rebates for new permanent residents of Canada and related exemptions will be available to eligible newcomers. Foreign nationals studying and working in Ontario who become permanent residents will have the opportunity to apply for the rebate.

The province is also working with municipalities that are looking to establish a vacant home tax. The authority for municipalities to implement such taxes exists in the Municipal Act. The City of Toronto has introduced a vacant home tax. Ottawa is also preparing to implement similar taxes. A working group will be formed with municipal representatives to facilitate the sharing of information and best practices.

“There is no silver bullet to solving the housing crisis,” said Minister of Municipal Affairs and Housing Steve Clark. “Addressing the housing supply crisis is a long-term strategy that requires long-term commitment and coordination with our partners and between all levels of government.”

As well, Ontario will consult on potential measures to address concerns related to land speculation, such as exploring ways to discourage construction slowdowns that may be artificially driving up prices of new homes for families.