Want to learn how you can perform a digital property evaluation? Download our free eBook of the month.
Non-resident home buyers have recently been hit with a foreign buyer tax in Ontario.
Everyone knows that housing prices have skyrocketed in the past few years in the Greater Golden Horseshoe area. Media pundits, economists, real estate professionals and your average armchair critic all have their theories about why prices have been climbing so high. In an effort to curb this market, the aforementioned tax has been introduced.
This isn’t exclusive to Ontario, or even Canada. Other jurisdictions have introduced non-resident measures as well:
Ontario also thinks the solution to the problem is levying a tax on foreign real estate buyers. In their recently implemented Fair Housing Plan, the Ontario government introduced 16 new measures from rent control to land transaction regulations. You can read more about their 16-point plan here: https://news.ontario.ca/opo/en/2017/04/making-housing-more-affordable.html.
However, the point that is generating the most press is the controversial Non-Resident Speculation Tax. It’s an attempt to try and calm the rocketing housing market in and around Toronto by targeting foreign buyers and speculators. Commonly known as the Foreign Buyer Tax, it applies to:
The Non-Resident Speculation Tax primarily targets the act of acquiring real estate while a non-resident of Ontario. The tax was generally welcomed by economists as a small step to control spiraling prices. Will the tax have any impact in Ontario? It’s too early to tell what impact, if any, the tax will have on housing prices in the GGH.
This measure is based on the assumption that foreign home buyers are the primary reason for the steady increase in hot market housing prices, but are they solely to blame? Could it be population growth? What about supply and demand? Whatever is driving the increase in prices, foreign buyer taxes seem to be having little impact on the housing market according to the Financial Post: http://business.financialpost.com/personal-finance/mortgages-real-estate/yep-still-going-up-canada-new-housing-prices-rise-on-vancouver-toronto-strength.
As a real estate sales professional, it’s to your benefit to stay on top of the latest trends in the housing market so you can provide your clients with the best advice possible. Find out how the reports and information available through GeoWarehouse can help you become the expert. Visit www.geowarehouse.ca today!