BNN
A print advertisement by a third-party real estate brokerage seen in a Hong Kong MTR (Mass Transit Railway) station, while promoting Fleur Condos by Menkes Developments Ltd. by illustrating features including the future condominium apartment’s neighbouring universities, financial district, and metro system, also claims that the first 30 buyers would have included in the purchase price the rent pertaining to the initial year as well as the foreign buyers tax.
While the identity of the third-party remains undisclosed, Menkes Developments Ltd. clarifies that the print advertisement was not produced nor authorized by Menkes. Menkes spokesperson says that the developer “did not instruct the brokerage to make any offers regarding the ‘foreign buyers tax’ recently introduced by the Ontario government, nor authorize any incentives to avoid or obfuscate measures meant to govern the purchase of real estate in the province by non-residents”.
According to Toronto Real Estate Board (TREB), in April 2017, the Ontario government introduced the 15% non-resident speculation tax (NRST) and 15 measures aimed at cooling Toronto’s hot real estate market. In the same month, overall sales in the Greater Toronto Area (GTA) declined, but condominium sales increased, with an 8% increase in the 416 region. Prices and the number of new listings increased significantly.
“Offering this kind of incentive to prospective buyers is permitted but developers are still better off to selling to Canadian citizens and permanent residents rather than paying the NRST for a foreign buyer,” says the Ontario Ministry of Finance. “We’ve seen throughout many industries that businesses use promotions including ‘pay no tax’ to encourage sales of their product. Regardless of these promotions, the tax is still paid to the government. If it isn’t, violators are subject to fines, penalties or imprisonment.”
Menkes noted that a third-party brokerage is essential in the successful sale of a condominium suite in today’s market. However, the brokerage’s marketing activities are not directed nor approved by the developer. “We are continuing to investigate the actions taken by the Hong Kong-based brokerage, and will remind them that any unauthorized claims or misrepresentations on behalf of the developer will not be tolerated,” Menkes said.