21 Apr Details/Timing of the 15% Non-Resident Speculation Tax (NRST)
Thanks to The Lang Team our Mortgage Specialists for sending us the Updates from Today.
We have received numerous calls today regarding the 16-point plan implemented by the Ontario Government.
The most pressing question we are being asked is about 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 found at the following 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.
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)
- Implement a new 15% Non-Resident Speculation Tax (NRST)
- Expand rent control to all private rental units (with “an increase capped at 2.5%”)
- Introduce changes to the Residential Tenancies Act – including standardized leases
- Create new market housing and affordable-housing units with surplus provincial land
- Empower the City of Toronto “and potentially other interested municipalities” to introduce a vacant homes property tax
- Making sure multi-residential apartment buildings are charged property taxes at similar rates to other residential properties
- A $125-million program over five years “to further encourage the construction of new rental apartment buildings”
- Giving municipalities “flexibility” to use property taxes to fuel development
- Creating a “Housing Supply Team” to identify obstacles to housing developments and work with developers and municipalities to address them
- Working to “understand and tackle” real-estate practices that allow “paper flipping,” which includes using assignment clauses for real-estate speculation
- Reviewing rules for real-estate agents to “ensure that consumers are fairly represented”
- Establishing a “housing advisory group” to advise the government on the housing market and the effects of the newly announced changes
- Educating consumers on their rights in real-estate transactions
- Partnering with the Canada Revenue Agency to strengthen reporting requirements and make sure taxes are paid on real-estate purchases and sales
- Overhauling standards for elevator repair
- An updated Growth Plan with municipalities to address density and “an appropriate range of unit sizes”
Other Useful Articles:
While additional information will undoubtedly be circulated in the coming days, the most helpful articles we have found on the subject thus far are included below:
We hope the above is timely and helpful, and if you have any questions please don’t hesitate to contact The Real Estate House to discuss.