NDP housing critic motions for speculation and vacancy tax
The motion urges the Ford government to use tax policy to deal with record prices in Toronto real estate
Ontario NDP housing critic Jessica Bell introduced a motion at Queen’s Park for a speculation and vacant home tax bill just as prices in the Toronto real estate market reached the highest levels ever.
For the month of May, the average price for a detached home was $1,716,272 in Toronto and $1,331,176 in the 905, according to the Toronto Regional Real Estate Board (TRREB). Premier Doug Ford’s majority government will likely defeat the motion, which takes a policy approach to remedying those prices, and stick to using Municipal Zoning Orders, which can override environmental concerns, to fast-track developments.
“Skyrocketing housing prices have made the dream of home ownership out of reach for many Ontarians, particularly young people and newcomers,” Bell said in a statement introducing her motion for new taxes on properties in the Greater Golden Horseshoe Region in Ontario on June 3.
The MPP’s motion recommends a speculation tax that affects property owners who pay the majority of their taxes outside Ontario while gaining equity on local real estate.
The speculation tax would make owners pay two per cent of their property’s value. Bell also motioned for a two per cent vacant home tax on investor-owned properties left unoccupied for six months of the year or more. Tax exemptions would be available for those dealing with natural disasters, separation and death, and organizations like charities or day cares serving public interests.
At a virtual press conference, Bell cited independent research that showed Toronto has a condo vacancy rate of 5.6 per cent. She said the estimated $88 million revenue from the speculation and vacant home taxes can be to affordable housing programs while applying downward pressure on prices in the city.
“Doug Ford has helped speculators and large developers rake in record profits while renters and first-time home buyers have been left behind,” Bell said. “Ontarians earning Ontario incomes and paying local taxes can’t compete with wealthy outsiders who do not pay local taxes when they bid on a home.”
Bell’s motion embraces alternative solutions that developers and real estate associations don’t want to entertain, for fear of stifling demand and profits.
Too often organizations like the Ontario Real Estate Association (OREA) and the Toronto Regional Real Estate Association downplay possible solutions to the affordability crisis like stricter mortgage rules, an end to blind-bidding and taxes that mitigate demand. Instead, they continuously bang on the drum for more supply (read: more development), which the Ontario government uses as an excuse to build on protected Greenbelt areas.
Last fall, the OREA and lobbyists even campaigned to cut land transfer taxes as well as red tape to fuel more development.
The average selling price for homes were up just over a single per cent from April to May, from a recorded 11,951 sales across the GTA. While May is typically the busiest month for sales, the transactions were down 13 per cent since April and 24 per cent below the 15,646 transactions reported in March.
And though prices were marginally up for detached and semi-detached homes across the GTA, the average selling price for condos in Toronto took a slight dip from $727,137 in April to $716,976 in May.
“In the absence of a normal pace of population growth, we saw a pullback in sales over the past two months relative to the March peak,” said TRREB President Lisa Patel.