The 15 percent levy will apply to non-Canadian citizens, non-permanent residents, and non-Canadian corporations buying residential properties containing one to six units in the greater Toronto area, the provincial government said in a statement Thursday. However, Sousa hasn't said exactly how he'll make them pay more in tax.
Sales in Greater Vancouver, once the country's hottest real estate market, fell 31.5 per cent compared with a year ago. "Therefore, any moderation in prices linked to the tax in the Toronto area is likely to take longer to materialize than Vancouver, where the effect was nearly instantaneous".
"When young people can't afford their own apartment or can't imagine ever owning their own home, we know we have a problem", she said. "And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act".
Ontario is also expanding rent control, which now applies only to units built before November 1991.
The plan states it will prohibit above-guideline increases where elevator work orders have not been completed and make technical changes at the Landlord-Tenant Board to make the process fairer and easier for renters and landlords.
The actual national average price of homes sold in March in Canada was C$548,517 (US$410,291) prior to seasonal adjustment, according to the report.
The province is also considering to bring in a standardized lease, similar to that exists in Quebec, to stop landlords from putting illegal clauses in their contracts with tenants.
Add in contradictory municipal policies that encourage higher residential densities, while simultaneously discouraging the development of multi-unit residences (apartments and townhouses) wherever there are single-family homes.
Average rents went up 11 per cent, while the vacancy rate fell to a 12-year low of 1.3 per cent.
The proposed legislation includes expanding rent control, incentives for those who build rental housing and new tools that will allow Toronto city council to follow Vancouver's lead in imposing a tax on vacant homes.
Ontario Finance Minister Charles Sousa is giving strong hints that the government's much-anticipated house affordability package will include measures targeting real estate speculators, or as he calls them "property scalpers".
"But we do believe that there is a need for interventions right now to calm what is going on, to put protections in place". "If we spread and distribute economic development across the province it can relieve the pressure on the housing market in the long term".
Sousa acknowledged the government faced a hard balancing act finding policies that would stabilize prices without damaging the market.
When Vancouver implemented a foreign buyer tax last summer, many observers and economists predicted investment would flow to Toronto.
The new plan extends rent control to all private rental units in the province.
"The recent surge in house prices in Toronto and in most of Ontario urban areas should induce home builders to continue to start new dwellings at a high rate".
The tax will apply to purchases in the Greater Golden Horseshoe, an expanse of land that includes the Greater Toronto and Hamilton Area, as well as the surrounding region stretching from Peterborough through Barrie, Waterloo and the Niagara Peninsula to the USA border.
Use surplus provincial land assets across the province to develop new and affordable housing.
This is due in part to provincial Greenbelt policies which restrict new housing development and provincial and municipal government red tape that can delay new housing construction for years.
The province also indicated that they have a number of things on their To Do list including looking into assignments of new construction properties and providing more transparency into real estate transactions.
The plan also includes establishing timelines for elevator fix so that they aren't broken so often in condos and apartments.