Ontario Finance Minister Charles Sousa sent Federal Finance Minister Bill Morneau a letter Monday that asks the feds to increase capital gains taxes on housing speculators.
The letter follows record house price increases in cities like Toronto and Hamilton that have made living there increasingly unaffordable. Sousa has asked that any speculators flipping a house should have more than 50% of the income they make taxable.
“Under the current rule, when you sell a home that is not your principal residence for a profit, only 50% of the capital gain is included in taxable income,” Sousa told media.
Should this request become legislature, capital gains would be taxed at higher rate, making it a little less profitable to sell a home and somewhat discouraging speculation.
This is the Ontario government’s first major step towards addressing housing unaffordability. Sousa’s request comes ahead of the release of the 2017 federal budget on March 22. His suggested change would increase inclusion rate for non-principal residences. Sousa’s approach falls in line with opinions expressed by other key players in the housing industry, such as Scotiabank.
Sousa has previously said that Queen’s Park is considering “a suite of options” to safely regulate the housing market and make housing more affordable for Ontarians. He continues to stay mum on what exactly those options are, but there’s a good chance we won’t have to wait long. The Ontario provincial budget for 2017 is set to be revealed next month and it’s likely that any new housing measures will be part of it.