Agents on potential Toronto foreign tax

Readers from across the country have weighed in on a potential foreign buyers tax in Toronto. Here are the results.

A whopping 284 REP readers took our latest poll, which asked whether or not a foreign homebuyer’s tax in Toronto was a good idea.

And results differed based on where agents are based.

The majority (60%) of Toronto-area realtors believe a potential tax on foreign homebuyers would have a negative impact.

Voters outside Toronto, however, were split right down the middle. 49% argue it’s a good idea compared to 51% who argue the opposite.

“This is a very ill advised tax; foreign investment creates good high paying jobs. Our foreign investment in the GVRD dropped from over 2 billion in the month or so before the tax was announced to 17 million in about a month after,” REP reader Bob Edwards wrote in the forum. “Foreigners searching to buy in Vancouver has dropped by over 90% yet searches by foreigners looking to invest in Seatlle increased over 100% at the same time.

“Capital will always go where it is appreciated. Our BC government’s stupid tax and the loss of billions in investment is going to create a lot of jobs in Seattle and other investment friendly cities.”

As it stands, policymakers in Ontario – namely Kathleen Wynne and Finance Minister Charles Sousa – remain on the fence.
 
However, one former finance minister has come out in favour of implementing a foreign homebuyer tax in Canada’s largest city.
 
In a commentary written for the Financial Post last week, the man formerly tasked with presenting the country’s budget and overseeing the Bank of Canada came out in favour of taxing foreign buyers in Toronto.
 
He cites, among others, the influence B.C.’s 15% foreign tax – which went into effect in early August -- will have on foreigners who will instead choose to park their money in Canada’s largest city.
 
“Foreign, especially Chinese, buying is often motivated by finding a safe place to hedge against geopolitical risk.
Political tension in China has elevated that perceived risk, resulting in capital flight,” Oliver wrote. “The obvious implication of the B.C. tax is that high-end foreign buyers, attracted to Canada’s stable political environment, will gravitate to the GTA where housing is substantially less expensive than in Vancouver.”
 

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COMMENTS

  • by MF 2016-10-03 11:06:35 AM

    Re. “Capital will always go where it is appreciated. Our BC government’s stupid tax and the loss of billions in investment is going to create a lot of jobs in Seattle and other investment friendly cities.”
    It has been said, 'If things and actions are what they are, and their consequences will be what they will be, then why should we wish to deceive ourselves?' (Bishop Butler in the 18th century).
    A Venezuelan solution Made in Canada, might make nationalists 'feel better', but driving away investment is not the way to strengthen the market. Supply and demand are part of the nature of things; when Diefenbaker ranted against foreigners and Bay Street, it didn't achieve anything for Canada.

  • by George Christopoulos 2016-10-03 11:37:15 AM

    I'm trying to understand how empty residential units owned by foreign investors will create jobs.
    Speculating in residential real estate and investing in Canadian business are two very different things.

  • by LanceH 2016-10-03 11:58:45 AM

    Dear MF. I agree, except it's not "nationalists" that wish to "make the rich pay", it's the Lefty's! Comparing to Venezuela is right, and just like them, when things get worse, their answer will be to "do more", (dig in deeper) rather than back off. In Venezuela, it takes over a year for your new car to arrive, causing the price of resales to jump. So instead of opening up the markets, they've tried to regulate the price of used cars, which everyone will simply find ways around.

    George, a fair question. Maybe they should've put a "business investment" carrot out their first, then later added a modest tax on houses (not big enough to frighten them), thus, "gently steering them" towards business investment and creating more jobs than the modest amount created by a home purchase (and reno and upkeep).

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