Any new tax on real estate transactions can temporarily slow the price rises because it breaks the momentum of the market and gets people to pause and reassess reality there.  The real question though, is whether the 'craziness' in pricing is a bubble. I propose that you can determine that  by checking whether rentals are also scarce and rising fast in price.  If they also are ,then it isn't a bubble since 'tenants' mostly can't assign leases or otherwise speculate in rentals. I don't know about TO, but here in Van, rentals are hard to get and becoming extremely expensive and total listings for homes for sale appear to be dropping daily.  That probably means further price raises to come because we are actually short of houses.  Every seller must either leave the area, die, move in with family or roommates, rent or buy again nearby.  Buying and renting in the same area don't open up any net available housing ,you will note.  Conclusion: too little housing ( thank gov't for that)!