Another year behind us!
Real estate has been a hot topic these past few years. Home ownership has become the main asset for many. It has been viewed as a way to build wealth and plan for retirement. Governments have encouraged this by making it easy for people to borrow and purchase more expensive homes. Now it appears that government is ready to reap the benefits of this asset through taxation.
2020 will be about taxes – overt and hidden – on our home and how to pay for them.
Direct Government Taxation
Governments appear intent on taxing our homes to pay to pay for their spending. Property taxes are on the rise. Toronto has announced nearly 10 percent in property tax increases starting in 2020. Since property taxes from home appreciation are phased in over a number of years, further increases can be anticipated.
Local taxes affecting homeowners and condominium communities have been on the rise. These include taxes on vacant homes, foreign owners, carbon and water drainage. Some of these taxes are currently in place. Others are being considered.
Indirect Taxation – Condominium Authority of Ontario (CAO)
Two years of CAO implementations have increased the cost of managing our condo homes. This constitutes a dramatic increase in the costs paid by condominium corporations necessitating higher condo fees.
- Management fees to condominium corporations have increased to reflect licensing costs and increased workload to comply with disclosure requirements.
- Engineering costs have increased to comply with electric vehicle charging station regulations implemented by CAO. Requiring condominium corporations to undertake a consultant report on the practicality of installing electric vehicle charging stations makes little sense when so few are purchasing these vehicles.
- Legal costs have increased as condominium corporations deal with Condominium Authority Tribunal (CAT) proceedings. Some communities are finding it more economical to not participate in proceedings justifying their rightful actions and pay financial penalties. Should CAT expand the scope of matters they deal with, as anticipated in 2020, these costs are likely to further increase.