“Where are those foreign investors going to go? They're not going to want to pay that 15 per cent, so they're going to now dump it into the Toronto real estate market, which is already hot,” Toronto-based real estate agent Derek Ladouceur said in an interview with The Canadian Press
B.C. officials said that the new tax was intended to help cool down Vancouver’s overheated residential real estate segment. However, many Toronto agents voiced fears that homes in the city, which have seen average purchase costs grow by 17 per cent year-over-year in June (up to $746,546), would only become more inaccessible to domestic buyers as a result.
“Certainly I think Toronto and potentially other markets like Montreal will start to become more attractive, because comparatively speaking they will be less expensive,” Sotheby's International Realty Canada president and CEO Brad Henderson said.
“With an additional tax [Toronto activity] will grow exponentially, in my view,” Dianne Usher of Royal LePage agreed.
Toronto mayor John Tory said that the city government in not in a rush to decide about intervening in the affordability crisis, although he added that implementing a similar levy on foreign buyers—which have been estimated to own around 3.3 per cent of the city’s condo units—is not out of the question.
“I think in the end what people want to know is this: they want to know that if we're going to do anything, that it's going to be effective, not that we're going to do something for kind of show business or political purposes or even for revenue-generating purposes,” Tory stated.
New tax on foreign buyers might induce price growth instead - analysis
Canadian professionals’ statements reflect Chinese fears over new tax
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Eager to sidestep B.C.’s just-implemented property transfer tax on foreign buyers, enterprising overseas nationals might instead only flock to Toronto in droves and inflame the city’s market further, according to local industry professionals.