Foreign buyers’ tax in Toronto? Please, no
In the light of the recent events in BC, Richard was approached by Wayne Karl of the Yellow Pages Next Home, to share his thoughts on the situation.
Here’s an excerpt from the article:
Now that BC has introduced a 15-per-cent foreign buyers’ tax intended to calm real estate purchases by non-Canadian residents, speculation is rampant that similar legislation is on its to Ontario – or more specifically, Toronto.
Ontario Finance Minister Charles Sousa, part of the committee announced by Federal Finance Minister Bill Morneau in June to look for ways to improve housing affordability in Canada’s hottest markets, has said he will be looking at the effectiveness of BC’s, as a possible measure to address eroding affordability in Toronto.
And Prime Minister Justin Trudeau has repeated that tackling affordable housing is on his agenda.
But like their counterparts in Vancouver, realtors in Toronto want nothing to do with such action.
I don’t know there was a need for it in Vancouver, as their market was already softening for the past three months,” Richard Silver, senior vice-president, sales, Sotheby’s International Realty Canada, told YPNextHome. “If you were to do this in Toronto, people would move to the suburbs even more. We need to keep an eye on what will happen in Vancouver as it may not solve the problem but create others. What happens to the ancillary industries if the building market shuts down? My concern is that this was a knee-jerk reaction for a political agenda not enough research.”
“Knee-jerk” is also how the realty industry in Vancouver feels about the BC government’s action.
“Housing affordability concerns all of us who live in the region,” says the Real Estate Board of Greater Vancouver. “Implementing a new real estate tax, however, with just eight days’ notice and no consultation with the professionals who serve home buyers and sellers every day, needlessly injects uncertainty into the market.”
Silver foresees similar challenges in Toronto, should a foreign buyers’ tax be implemented there.
“There could be major repercussion to builders who have sold units in buildings to offshore buyers, who will now have to pay 15 per cent more than they agreed upon. You could have floors of buildings walking from their deposits rather than closing. Very little good ever comes from knee-jerk political involvement in any marketplace. This ‘solution’ could cause a large number of unforeseen issues, and I don’t think enough research was done before implementing.”