Does the Ontario Election Impact my Real Estate investments?

Elections Ontario location at Bayfield Mall in Barrie. Raymond Bowe/BarrieToday

Yes. Here is how:

The Ontario government plays a significant role in shaping real estate policies that impact homeowners, buyers, and investors. One key area of influence is the Land Transfer Tax, which is controlled by the province and affects housing affordability. Additionally, the government's policies on housing supply and development determine the availability and pricing of homes. Property taxes are another crucial factor, as assessments conducted by the Municipal Property Assessment Corporation (MPAC) are indirectly guided by provincial regulations. Together, these policies shape the overall real estate landscape in Ontario. While capital gains on primary residences are federally regulated, many other factors that impact your home’s value and costs are decided at the provincial level.

1. Capital Gains Tax on Primary Residences

Federal Jurisdiction: Capital gains tax policy, including the exemption for principal residences, is determined by the federal government through the Canada Revenue Agency (CRA). Ontario's provincial government does not have jurisdiction to impose or modify capital gains taxation on primary residences directly.

2. Land Transfer Tax

Provincial Jurisdiction: The Ontario government directly controls the provincial Land Transfer Tax (LTT). It sets the rates, exemptions, rebates, and conditions related to property transfers.

For instance, Ontario currently offers rebates such as the First-Time Homebuyer Rebate, reducing the cost for qualifying individuals.

Municipalities, such as Toronto, can impose an additional Municipal Land Transfer Tax (MLTT) subject to provincial approval.

3. Property Taxes

Municipal Jurisdiction with Provincial Oversight: Property tax rates are set by local municipalities, but the Ontario government influences these through:

Assessment: Conducted by the Municipal Property Assessment Corporation (MPAC), a provincial agency.

Regulation and Appeals: The province oversees regulations around assessments, property classifications, and appeals procedures.

4. Housing Policy and Development

Provincial Mandate: The Ontario government has extensive jurisdiction over housing policies, including:

Land Use Planning: Establishing zoning laws, urban growth boundaries, and land-use frameworks through the Planning Act.

Housing Supply and Affordability Initiatives: Implementing policies and regulations aimed at increasing housing supply and managing affordability (e.g., Ontario’s Housing Supply Action Plans).

Building Codes and Regulations: Enforcing Ontario’s Building Code, ensuring safety and standardization in residential construction.

5. Other Provincial Influences on Homeowners

Rent Control Policies: Setting regulations around rent increases for existing tenants.

Energy and Infrastructure Policies: Influencing homeowner costs through hydro rates, gas tax policies, and infrastructure spending (transit, roads, etc.).

Incentive and Grant Programs: Offering rebates or incentives for home renovations, energy-efficient upgrades, or renewable energy installations.