New Ontario 15%Non-Resident Speculation TAX.

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A place for serious discussion on any non-religious topic

New Ontario 15%Non-Resident Speculation TAX.

Postby Pondero » May 28th, 2017, 7:55 pm

Foreigners ,we are told are pushing up prices in the Greater Toronto Area, and houses are becoming out of reach of the hard working Canadian.We do know that prices have gone through the roof the last three years or so.
Now,the house next door to me was purchased a couple of years ago for about 1.087 million (that is a close estimate). Yesterday, it sold for $1,900,000 according to Robert who lives next door down the street and has a friend in the Real Estate business. My wife, who has a good memory for figures says the seller wanted $1,964,000 for the house but didn't get it. (I should add that he has fixed it up tremendously since he purchased it, I have been inside.However , I don't think he spent more than $200,000 on upgrading,that means he has made nearly $800,000 in profit,but, there are other costs too, heating, real estate and property taxes over two years to pay .Still he made a damned good profit to be shared with his son and partner and himself, who devoted full time to the endeavor).
The truth to all this will soon be out when the sales figure is published in Real Estate brochures.I expect that to happen next week, the post office will deliver such advertising material to me as mail, they always do.
If I have the wrong sales figure I will tell you.
About the 15% Speculation tax.

This tax is for a non-resident of Canada buying one to six residential units in the Golden Horsehoe area of Ontario.
This tax is in addition to any Land Transfer Tax payable.

What if you are a Canadian citizen but also a non-resident?
If you are a Canadian citizen, you do not pay the tax.Even if you are a non-resident , living in the U.S. Great Britain of Hong Kong, as long as you are a Canadian citizen, you will not pay this tax.

What if there are three buyers buying a property that cost $3,000,000 ,each owning a third of the property, with two owners being Canadian citizens and one being a non-resident?
Even if the non-resident will own only one third of the property, they must pay 15% on the entire purchase price.

Lenders ask for parents to sometimes co-sign a mortgage for their children buying a home and take a small percentage of title,even 1% , to do so.What happens if the children are permanent residents of Canada but the parent is a non-resident?
This is a disaster, because under the new rules, even if the parent was holding the 1% title in trust for the children , they must pay 15% of the tax on the ENTIRE purchase price.

Rebates.
Even if the tax is paid ,rebates will be available if the non-resident becomes a resident of Canada or a Canadian citizen within four years of closing.

EDITED
According to one study, the average adult has a shorter attention span (eight seconds) than a goldfish (nine seconds).
This is not surprising in today's wired , or wified world.
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Pondero
 
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