Toronto’s Municipal Non-Resident Speculation Tax (MNRST) for Residential Properties
Toronto is intensifying its efforts to regulate foreign investment in residential real estate. The upcoming implementation of the Municipal Non-Resident Speculation Tax (MNRST), pending city council approval, adds another layer to existing federal and provincial measures.
Among the existing regulations are the Federal Government’s two-year ban on foreign buyers and Non-Resident Speculation Tax (NRST), implemented in 2017, which currently stands at 25% of the property purchase price.
According to Trevor Valade, Vice President of LandLord Property & Rental Management Inc., the government’s objective appears focused on mitigating speculative purchases by foreign investors. The introduction of the MNRST, which imposes an extra 10% tax on non-resident buyers, is presented as Toronto’s effort to tackle housing affordability challenges and alleviate strain on the local housing market.
However, Valade argues that while targeting foreign investment is a step, it sidesteps the broader issue of inadequate housing supply. He emphasizes the necessity of bolstering inventory levels, including purpose-built rentals, to effectively alleviate affordability pressures.
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Valade’s perspective is complemented by that of Gotham, Director of Design Build and LandLord Renovations Inc. Gotham proposes additional measures, such as streamlining the permit process for builders with a proven track record of constructing rental housing, alongside existing incentives like eased zoning requirements. This approach could incentivize more developers to invest in rental properties, thereby contributing to a more robust housing supply and addressing affordability concerns in Toronto.
