11/1/2019
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Posted in Foreign Buyers by Vanguard Realty | Back to Main Blog Page
A federal tax on foreign real estate speculators is expected to be passed by Parliament, according to Blacklock’s Reporter.
The first of its kind, the equity tax will penalize foreign real estate buyers by 1% and the Parliamentary Budget Office expects the tax to rake in revenues of $217 million in the first year.
The tax would apply to all residential properties owned by non-Canadians — including corporations and trusts — but homes, condos and townhomes that are rented to tenants who are not immediate family members will be exempt.
Prime Minister Justin Trudeau and his Liberals campaigned on taxing offshore buyers.
“To limit the housing speculation that can drive up home prices, we will put in place a consistent national tax on vacant residential properties owned by non-Canadians who don’t live in Canada,” the Liberal Party wrote in its campaign platform.
The tax mimics what some provinces have already implemented.
British Columbia introduced a 15% property transfer tax on foreign property buyers in downtown Vancouver in 2016, which has since increased to 20% and has expanded to include more regions.
Ontario imposed a 15% house and condo tax on foreign buyers in the GTA in 2017.
Some have challenged the tax. In B.C., for instance, a Chinese real estate purchaser called the provincial tax discriminatory and took the case to the B.C. Supreme court.
“The Foreign Buyers’ Tax can be directly linked to this long-standing legacy of racial discourse in B.C. and Canada, in particular how ‘blaming the Chinese’ has shaped and continues to shape public discourse,” University of British Columbia professor Henry Yu testified.
The challenge was ultimately rejected by Justice Gregory Bowden, who wrote: “The view that foreign nationals significantly contributed to the escalation of prices of housing in Greater Vancouver is neither a stereotype nor a continuation of racist policies from the past.”
However, according to a 2017 report from Statistics Canada, foreign condo ownership in Toronto and Vancouver totalled 7.2% and 7.9% respectively, with the report claiming foreign real estate ownership of single-family homes insignificant at 2% in most large cities.
Foreign Buyers, Foreign Buyers Tax, Foreign Investors, Real Estate Speculators, Speculation Tax
