For a little while now I’ve been talking about the likelihood of the government fiddling with the Ontario housing market again.

When it arrives, it will probably be called an intervention or policy change or some other wording that communicates certainty and precision.

Make no mistake though, it will be fiddling.  I call it that because it will be done with the hope it will help, rather than the certainty it will help.

Any real estate market is influenced by a number of factors – demographics, interest rates, the economy – that are largely not within the control of government.  Municipal, provincial and federal governments can impact real estate through the introduction or removal of policies such as tax credits, deductions and subsidies.

Such policies are blunt tools at best, hammering at one desired outcome.

In the past we have seen mortgage insurance qualification changes, tweaks to land transfer taxes, adjustments to rebates and even attempts to outright tell banks what interest rates they should charge.

These policies often have unintended consequences, pushing buyers from one area to another, causing certain price points to become less attractive and others more attractive and so forth.

To his credit, Ontario Finance Minister Charles Sousa recognizes that any fiddling with the Toronto housing market could impact elsewhere.  In an article in the Star ( on March 9, 2017, he said “If there’s an appreciation happening and you start to poke a bubble, to what extent am I then implicating something with unintended consequences for other parts of the region?”

We’ve witnessed some truly staggering sale prices in different areas and different housing types over the last couple of months.  With each unbelievable sale price, I have been saying the government will once again consider what can be done to calm the market.

Yesterday’s announcement that the Ontario government is again considering a Foreign Buyer Tax was exactly what I expected to happen.  There can only be so many news stories and water cooler conversations about how bonkers the real estate market is before the people in government feel pressured to get involved.

There is a lot of misinformation floating around about how a Foreign Buyer Tax works and I wanted to clarify it for you.  As well, I wanted to talk about the possible impact if one is implemented in Toronto or Ontario.

Using the Greater Vancouver Regional District foreign buyer tax as our guide, this is how it would work.

Following some period of discussions and deliberation, the government would announce a Foreign Buyer Tax would be implemented on a certain date.  This additional land transfer tax is set at 15% of the fair market value of the property.

The additional 15% land transfer tax applies on all applicable transfers registered with the Land Title Office where the purchaser is a foreign entity. Foreign entities are transferees that are foreign nationals, foreign corporations or taxable trustees.  In most cases, this means the purchaser is neither a Canadian citizen nor a permanent resident.

It applies to any residential property transfer, even those that are normally exempt from land transfer tax, such as a transfer between related individuals.

On the assumption that the tax would be on the GTA and not just Toronto itself (to prevent even more pressure on the 905 area pricing), this is what that would look like in dollars, using the average sale price as of February, 2017.

In Toronto, the 15% foreign buyer tax would add between $77,000 to $236,000 to the purchase price for non-Canadians.

Outside Toronto in the 905 area code, the impact is less as the average sale prices are lower.  The range for this area is $61,000 to $166,000.

You can see why such taxes are so appealing to government.

  • On the one hand, they have concerned (and in some cases angry) residents complaining about the market being unaffordable for those who live and work in the area.
  • On the other hand, they have foreigners who clearly view Canadian real estate as a good option for investment. Whether this is because of our high standard of living, our stable government or our currency value is a question for another day!

When a foreign buyer tax is imposed, it provides substantial tax revenue to the government, soothes concerned local voters…er, I mean residents, and might even help calm the market.

My prediction is that we will see a foreign buyers tax in the GTA this year.  It’s becoming too hot a political topic to do nothing and it brings in revenue from people who can’t vote against the government in the next election.

If we follow the pattern that took place in greater Vancouver, such a tax will impact the average sale price in the GTA considerably.  It will likely drive up prices in places like Guelph and Hamilton, much like Victoria prices jumped in BC.  That slowing of the market will likely be met with relief but raises the issue of what happens if other factors such as interest rates also slow the GTA market in the future.  The same residents who clamoured for the tax will not be happy if their property values start decreasing.

If you or someone you like wants to take advantage of these unbelievable sale prices while they last, please get in touch with me.  I’d love to discuss selling in this market and be responsible for what comes next.





Place the main part of the kitchen counter on the south and southeast side of the kitchen, with big windows around it, so that the sun can flood in and fill the kitchen with yellow light both morning and afternoon.

It seems almost quaint in this seller’s real estate market to be talking about the placement of a kitchen counter so it gets the sun.  Such nuanced discussions of the best way to lay out a kitchen are not discussed when buyers feel lucky to be able to find a home at all.  There will come a time soon enough when buyers can once again have preferences on things like kitchen counter location.

This rule, like a number of others we’ve discussed, raises the idea that how a room or parts of a room are aligned with the exterior world of sun and light really matters.  It makes the difference between a room we instinctively like or a place that might tick all the boxes but doesn’t really appeal.