The new Ontario home tax for offshore buyers will raise about $150 million for the first 2,000 homes sold. That guesstimate will be mostly one bedroom condos selling for $250,000 and another huge percentage of those 2,000 homes selling in the middle half million dollar range.
That’s at a tax rate of 15 percent based on the selling price. For a two bedroom condo selling for $500,000 that rate will give $75,000 to the government of Ontario and Canada.
A single family home in the Toronto area is selling for $1.2 to $1.5 million as of March of 2017. The tax for an offshore buyer at the rate of 15 percent will be $180,000 extra for the cheaper $1.2 million home and an amount of $225,000 tax on the home selling for $1 1/2 million.
The tax applies only to homes in the Golden Horseshoe area around Toronto. That means from Oshawa on the east, Hamilton on the west and Barrie on the north. London and Ottawa are outside of the very high demand area of Toronto’s 100 Kilometer radius.
The radius from the downtown area of Toronto is about 65 km east and west and about 85 to 95 km north. Niagara Falls is within the radius.
Details are leaking out today but basically if a Chinese student buys a home while going to university in Toronto, they pay the tax, but will be related part or all of the offshore tax if they apply for and become an official Landed Immigrant.
The annual Ontario government budget will give all the details of the new offshore buyers tax when it is released next week.
After talking to my best source of inside info (Peter the taxi driver) as to the percentage of offshore buyers in Toronto, the insiders say it’s about 30 percent non domestic buyers. The real estate agents and governments have been saying that it is just about 5 percent offshore buyers.
We will know the results other new tax on home sales after the first full month of May, but the agents selling the new condos will know within about 3 days of the tax being applied to get the instant picture.
If any Hong Kong citizen buyer was waiting until the end of April to close the purchase of a new home in Toronto, they will rush the close to be this Friday to avoid and save $300,000 tax on a $2 million home. They will save a cool 3/4 of a million on a $5 million home if they close the purchase by Friday, April 21st.
A former member of the S.A.E. (Society of Automotive Engineers), Mark Smyth has had a lifelong love for machinery. Driving a tractor on his family farm at age 4, he raced boats and cars during the 1960s and 1970s, both powered by gasoline and alcohol fuels. Having even used hydrazine (rocket fuel) as a fuel additive in drag racing, Mark learned all about synthetic lubes from a chemist who developed the very first synthetic lube oils to be certified for U.S. military specs back in 1952.
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