Explanation of Ontario new real estate laws and rulings and analysis in this article. Ontario Premier Kathleen Wynne announced that the Ontario government decided to impose cruel and discriminatory (xenophobic) rules on housing market, following the same “success story” of Vancouver city (read with huge irony).
To be exact, there’re saying that they need a legislator of Ontario to pass the new rules, but for some reason the rent control portion of the new rules is applicable beginning today! (this will give you hope that if the USA get rid of the North Korean government, there still will be a red Marxist dictatorship utopia in Ontario to remind people why excessive government is awful)
So, let’s just mention the main points that have been announced today by the CBC (just like any other Marxist utopia the government publicly mouthpiece announced the new glorious rulings of the dear leader Wynne)
1- A 15 per cent tax on home purchases by non-resident foreigners in Toronto and the Greater Golden Horseshoe. Wynne said the tax would not apply to new immigrants who plan to live here, but are instead aimed at speculators who will “never set foot in Ontario.” The proposed tax would apply to transfers of land that contain at least one and not more than six single-family residences, including semi-detached homes, townhomes and condos. It would not apply to transfers of other types of land including multi-residential rental apartment buildings, agricultural land or commercial/industrial land. A rebate would be available for those who later become citizens or permanent residents, as a well as foreign nationals working in Ontario and international students.
Explanation of Ontario New Real estate Laws and Rules #1: The overheating markets in Toronto, Oakville, Mississauga, Burlington and Hamilton will probably be unchanged for 2-3 months and start to climb again…. While the crazy housing market of Guelf, Ajax, Newmarket, Kitchener and Waterloo will probably go to moon! (Somebody should invest the relationship of the high ranking politicians and the real estate firms involved in those markets…. Like any other Socialist utopia, there might be couple of winners and losers picked here and there).
For the 15% tax of Chinese buyers, if the government haven’t figured it out, the Chinese investors have a very sharp noses for weak legislation; if you are going to say that a Chinese billionaire can save tens of millions of dollars, only by providing some temporary workers visa from a Chinese restaurant, something tells me no Chinese billionaire will pay that 15% tax.
2- A move to expand rent control to all private rental units in Ontario, including those built after 1991, which are currently excluded. CBC Toronto first broke the news when Housing Minister Chris Ballard said the government would move to remove the 1991 rule after residents complained of massive rent spikes. The issue that was highlighted in a CBC Toronto series of stories called “No Fixed Address.” The rent controls must come through approved legislation, but will take effect today, April 20. Annual rent increase for an existing tenant can be no higher than the rate of inflation. Rent increases will be capped at 2.5 per cent, even if the rate of inflation is higher.
Explanation of Ontario New Real Estate Laws and Rules #2: This only will hurt the law abiding non-newcomers. People will find other ways of making the same amount of money out of the same apartment (be it: A – renting to multiple people, B- rent it in Craiglist or kijiji instead of getting an agent nd listing it in MLS or C: just renting it on airbnb or there crazy ways).
3- A rebate of development cost charges to encourage building of more rental housing.
Explanation of Ontario New Real State Laws and Rules #3: Well, if you only though that crony capitalism was just an abject idea…. Why don’t you take a look at this glorious ruling? So, it is only bad if the ordinary people make money in the housing market! That’s a bubble! But the big construction companies; they are only making billions of dollars/year… how are we supposed to let them suffer more? We think giving free cash is not enough; the government of Ontario probably thinks people of Ontario owe the big real estate companies a back rub too.
4- A standardized lease document for all tenants.
Explanation of Ontario New Real State Laws and Rules #4: You’ve probably heard of amazing family courts of Ontario (such shining shrines to feminism); how would you like to go into a standardized government issued contract (just like the marriage contract) with a person you probably are not even going to meet? I mean, there is no way anything can go wrong over there…. And if something goes wrong, the government will probably get its act together to solve the problem in the next 50 years (you only need to stay alive to wait and see the amazing efficiency of central controlled economy in action).
5- A plan to look at practices that may be contributing to tax avoidance and excessive speculation in the housing market, such as “paper flipping” — a practice that includes entering into a contractual agreement to buy a residential unit and assigning it to another person prior to closing.
Explanation of Ontario New Real Estate Laws and Rules #5: The question is, if they are going to punish people who buy and sell contracts, are we are going to see the Toronto stock exchange be closed and thousands of those “paper flipping flippers” in hand coughs? Or is it only when the ordinary people learn how to make money using the contract law, the amazing socialist government comes into play to save the day?
6- New powers for Toronto and other municipalities to introduce a tax on vacant homes to encourage owners to sell or rent unoccupied units.
Explanation of Ontario New Real Estate Laws and Rules #6: there are so many things are wrong in this one. First of all, the government of Toronto already has all the powers in the book to raise or (God forbid) decrease taxes on the properties. But, let’s be honest, Ontario’s dear leaders need to hear themselves saying the words “increase the Tax” just to boost their own morals. The last Toronto mayor who gave back extra collected taxes was Rob Ford… and we all know that he “accidentally” got cancer and died young (just like Jack Layton, isn’t it a weird coincidence that any public official who is really for the people gets some sort of incurable cancer???!! Ummmm, no wonder the Ontario’s dear leaders need to remind themselves that they’re going to definitely raise taxes… because otherwise it will literary kills them)!
Secondly, isn’t their whole shtick here is that the housing prices are too high and people might not be able to afford it? How in the h3ll increasing taxes on the houses are going to make them more affordable? It will make the houses more un-affordable!
7- A move to identify provincially owned surplus lands that could be used for affordable and rental housing development. In Toronto the areas identified include the West Don Lands and 27 Grosvenor St. and 26 Grenville St.
Explanation of Ontario New Real Estate Laws and Rules #7: That only can mean two things, 1- they are letting the ordinary people know where to buy land so that it would be a good investment. 2- Yeah right! Probably there are couple of very clever investors have already bought all of those lands and we are never going to learn how they predicted such an amazing investment opportunity. It probably is the curse of being better informed.
8- A $125-million, five-year program to encourage the construction of new purpose-built rental apartment buildings by rebating a portion of development charges.
Explanation of Ontario New Real Estate Laws and Rules #8: Won’t you look at that??! Was it number 3 that they were going to give free cash (sorry rebate) to the builders? I guess they just want to make it clear that they are really wanted to give away cash (in case some of those poor builders didn’t get the message). So, if you are an ordinary person who saved money and want invest in a rental property; you are a bad individual who need to be taxed, punished and rebuked. But if you are a wealthy sleazy builder who makes mouse houses in the sky and sell them 3 times the price you spent to make them and also in every turn of event trying to trick your costumers to pay more, you are only a poor sole who literary is going to get hundreds of millions of dollars in cash. That is a strong government in action for you.
9- A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions. A government backgrounder on the measures announced today specifically mentions the practice of double-ending, when one agent represents more than one party in a transaction.
Explanation of Ontario New Real Estate Laws and Rules#9: well why don’t you look at this one?? If you are working as two person, you are only going to be compensated as if you were working as one person; that is how the great soviet union improved its efficiency; by punishing hard working individuals!
So, what’s going to happen?
hear is our prediction about the Vancouver housing market, almost a month ago.
So the answer to the question that what will happen? Is the real estate still a good place to invest in Ontario?
The answer would be more obvious after the real law comes out of the Ontario legislature. For now, these only might have two effects: 1- the foreign buyer who have cash at hand, might buy anything that they can buy at the moment. 2- Huge uncertainty, probably a little bit of stall in the market for couple of month, and after that when the people know a little bit more about what the government wants to do, the business will go as usual.
Just take a look at the Vancouver market right after the glorious market manipulation of great socialist leaders up in Vancouver:
Yup the market got a little bit of dip, until the Chinese buyers found a work around and the upward trend started last month. Please do yourself a solid…. do not vote for Kathleen Wayne and her lefty government anymore; and let’s hope all of the people involved in this crazy socialist government get their due date in the court (court of law that is).
Before we let the great communist party leaders of Ontario totally off the hook; there might still be a very dark connection to some of the real estate giants in the USA here too. Think of it this way, which will really benefit from divesting from Canada into USA. Let’s be honest, if the government of Ontario get successful with their announced objective of destroying Ontario’s housing market and scaring the Chinese investors from pumping Trillions of dollars into Canada’s economy (which in any other type of government would be counted as treason, but not in socialism, because everything is upside down in a socialist economy).
Recently, Warren Buffett announced that he will be more involved with Berkshire Hathaway’s real estate brokerage which is in the business of finding large investment opportunity for the wealthy Chinese to invest (the source from ZeroHedge article). It is a very crazy coincidence that the government of Ontario and Vancouver, two of very popular investment destinations for the wealthy Chinese suddenly started to scare the Chinese real estate investors away.