As a measure to help “cool” Ontario’s inflated housing market, Premier Kathleen Wynne introduced the “non-resident speculation tax” this past April. This tax includes a 15% surcharge for buyers who are not citizens or permanent residents. The new foreign tax seems, in our humble opinion, like it may create more solutions than problems. These foreign home purchasers are estimated to make up only about 5% of our overall housing market. This new tax, however, does not just impact foreign buyers. Lawyers are now responsible for providing the government with signed and certified statements detailing what is essentially unverifiable information about their clients. For example, the Ontario government now requires the following information from ALL buyers, when purchasing land or agricultural land with one to six residences:
1. Will the land be occupied as a principal residence?
2. Will the property be rented out?
3. Has the owner been physically present in Canada for 183 days in the preceding 12 months?
4. Is the owner a Canadian citizen or permanent resident of Canada? If not, what is the owner’s citizenship? (Strangely, Canadian citizens are not deemed foreigners under this law even if they never live in Canada.)
5. Is the registered owner holding the land in trust for someone else?
This is where things get tricky. It is now the responsibility of the lawyer to sign disclosure statements that verify the declarations made by the client. It’s pretty tough to know whether your client is being entirely truthful about their citizenship or whereabouts within the past year without doing some serious snooping, and hey, who has time for that kind of a black ops mission? However, the law considers anyone who “participates” in a false or deceptive statement during the signing of a deed to be legally responsible. Should these statements prove to be false, the lawyer is then held to twice the evaded tax and a minimum of two years in jail. Basically, if a buyer misleads their lawyer and the lawyer verifies their information, both can be imprisoned, the lawyer being held to a higher level of responsibility for the offense. Seems fair, right? We think not.
Enter the necessity for a knowledgeable legal team with integrated real estate services. By combining forces with a team of experienced realtors, our legal team is properly equipped to avoid any snags or bumps along the road (especially those that will land you in a cell, next to your trusty lawyer.) We combine a carefully cultivated team of experienced realtors who have depth knowledge about the real estate market with a team of lawyers with an extensive background in property law. We know where the line is, and that real estate is not the place to take risks. Don’t blindly make a legal mistake that will cost you years of your life. Hire a diligent lawyer who will make sure you check all the boxes for a clean and easy transaction.