A new vacancy tax has been implemented by the City of Toronto in an effort to increase housing supply. Homeowners in the city are required to declare the occupancy status of their property by February 2nd, 2023, which I would encourage you all to do. Properties that are vacant for six months or more during a calendar year will be subject to a 1% tax, calculated on the MPAC’s up to date Current Value Assessment of the property. Failing to make any declaration will result in the application of the tax and the appeals process for this is not yet clear, so it is a very important task (and a quick one) to complete. This will be an annual process, and our team will send out reminders to you each January to ensure it is not overlooked. Should you require the link to the form for submission, please let us know and we will forward it to you promptly.
The Canada-wide ban on foreign buyers has now come into effect, as of January 1st. This two-year ban will prevent most commercial enterprises and individuals outside of Canada from purchasing properties within Canada. There are some exceptions which we are happy to detail for you, as required. Please reach out to us with questions in this regard. According to Canada’s housing minister Ahmed Hussen, this ban is meant to discourage buyers from looking at homes as commodities instead of a place to live and grow a family.
Interest rates were a topic of great discourse during Q4 of 2022, and it is expected to be a continued factor in the real estate market in 2023. It is predicted that the Central Bank will raise interest rates once more to a 4.50% high at the end of January.
Another change that we covered extensively last month was the impending decision from the Ontario Real Estate Association regarding whether exclusive sales (sales that take place without being shown on MLS) will still be permitted. A meeting is scheduled in April to hear feedback from realtors and the general public on this initiative, and we are happy to continue to keep you updated with changes on this topic.
While the early January market is traditionally slow, the pace of the coming weeks will grant us indicators on how the following months and possibly year may unfold in terms of demand and absorption. The luxury market typically does not show signs of life until the end of the month at the earliest, but will also serve as a benchmark of how 2023 may unfold once it does.
Below is the video market report by Chestnut Park CEO Chris Kapches, and, as always, we welcome a call or an email to review your local market activity more closely with you.
