Real Estate Cheat Sheet: shocking rent increases and a crackdown on phantom bids
Finance Minister Jim Flaherty’s new mortgage rules sparked a rapid decline in home sales and reinforced just how central regulations are to housing markets. Below, we unpack three recent stories about navigating the regulatory landscape, covering everything from rent controls to tax breaks.
• Condo owners can raise rents as much as they want
Most condo renters have zero protection from hefty rent increases because buildings occupied after November 1, 1991 are exempt from Ontario’s rent control provisions. The Toronto Star says some tenants have faced hikes of as much as 10 per cent in a year as investor-owners respond to soaring maintenance fees and heightened demand for rentals with access to transit. The loophole—which local politicians say they want to close—also allows landlords to demand unreasonable rents as a means of kicking out undesirable tenants.
• Ontario plans a crackdown on “phantom bids”
The province wants to make it harder for realtors to fake multiple bids to put pressure on potential buyers—a practice that is reportedly on the upswing—by requiring them to provide written proof of all offers. It also wants to allow sellers to pick and choose the services agents provide, and with that the fees they pay.
• CRA goes after investment condo owners
The Canada Revenue Agency is targeting people trying to catch a tax break by lying about whether a property was their principal residence. (Canadians pay no tax on the sale of a principal residence, tax on half the capital gain from investment properties and full tax on properties bought with the intention to flip.) The fine for lying is up to 50 per cent of the tax owed, and some experts say innocent condo owners are being unfairly targeted in the hunt.