Last year, Vancouver introduced a foreign buyer tax of 15% on non-residents of Canada who purchased real estate in the area. The tax was introduced as part of the legislation aimed at curbing the skyrocketing real estate prices in southern B.C. and to address low vacancy rates.
Around the same time that the tax was introduced, real estate prices in Vancouver started to decline. However, while the Globe and Mail reported that prices fell 31% in the 5 months following the tax, real estate sales prices actually began to decline in March of 2017 – 6 months before the new tax was implemented in August.
Sales volume: Metro Vancouver detached homes
Some real estate associations and media outlets have continued to predict that Vancouver housing prices will further drop in 2017 – but it remains to be seen if this will be a direct result of the new foreign buyer tax or not.
For several years now, Vancouver and Toronto have been the hottest real estate markets in the country and so the question of the hour is, will Toronto eventually introduce a similar tax to that introduced in Vancouver?
It’s an interesting question that has so far received no clear answer. Towards the end of 2016, the BNN reported that Ontario Premier Kathleen Wynne had made strong indications that Ontario would not be following B.C.’s lead with a tax on foreign homebuyers. However, at the beginning of 2017, CBC News reported that Toronto Counsellor Jim Karygiannis was in favour of a tax of 5% levied on foreign buyers.
Since then, we’ve heard more and more individuals share their thoughts on a foreign buyer tax. TREB has urged the Ontario government not to introduce one, while Finance Minister Charles Sousa said that he’s considering it as a possibility to cool Toronto’s red-hot housing market. A recent study done by Ryerson University’s City Building Institute also suggests that the curbing of foreign buying is necessary, but that it may not be enough.
How does the real estate community feel about this notion? Global News has reported that some Toronto real estate sales professionals believe that “a foreign buyer tax in the Greater Toronto Area (GTA) would be ‘misguided’ at a time of decaying affordability in the city”.
What’s your take? Would you support a foreign buyer tax in the GTA? What impact, if any, do you think it will have on GTA home prices? Join the conversation – tweet us @geowarehouse or post your thoughts on our Facebook page.
No matter where the real estate market goes, the NEW GeoWarehouse can help you do more. Find out more by visiting www.geowarehouse.ca or calling 1-416-360-7542.