Poll results: Investors on Toronto foreign tax

With rumblings of a potential tax in Toronto growing, investors have had their say.

Nearly 200 readers took part in the poll, proving just how close to investors’ hearts the potential tax is.

Of those polled in Toronto, sentiment was split right down the middle. 52% of Toronto investors polled believe the tax would be a good thing for the city’s real estate market. The remaining 48% disagree.

However, the split was not nearly as close for investors outside Toronto.

Sixty-two percent of those investors believe a Toronto tax is a good idea. 38% disagree.

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 Kris Kooblall 2016-09-30 9:03:08 AM

    These are simply the facts:

    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.”

    Housing is a social and economic good and its primary function is to house Canadian families. It is not intended, nor should it be an investment tool.

    Canadian families have to live in proximity to their work and lives.

    Canadian families pay, on average, per family, per year in excess of $30,000.00 in direct and hidden taxes and foreigners not paying a tax on the purchase of Canadian residential real estate are being subsidized.

    A single detached average price in Toronto is approx. $1.2 Million dollars and 15% tax amounts to $180,000.00 which is collected in 5 to 6 years from the average Canadian family.

    Foreigners purchasing Canadian residential real estate are subsidized by Canadians in excess of $100.00 per day and invariably, these investments are not used exclusively for housing families; they are often used for extraneous purposes which may be flipping and re-selling for a profit and are often empty and there is an opportunity cost and a crowding out effect in this purchase.

    The Vancouver Mayor Mr. Gregor Robertson speaks with clarity and being informed which are seemingly completely missing in his opposite number here in Toronto, Mr. John Tory.

    The Premier of Ontario, Ms. Kathleen Wynne and Ontario's Finance minister, Mr. Charles Sousa pronouncements typify indecision and there is a cost to this indecision.

    Both suggest a concern that the imposition of a 15% tax may have reverberating effects, yet they are both not sure.
    One wonders if in an important province such as Ontario, there is such indecisiveness in a critical issue as the housing crisis at the highest levels, it begs the question......

    Housing and affordability by Canadian families and the resulting economic risks to the Canadian economy regarding regional disparity as captured in the June 2016 Bank of Canada's Report is not only a vitally important issue; it transcends partisan politics and affects not only the current generation but generations of Canadians to come.

    We are all consumed here and it affects each and every one of us.

  • by Applauding Kris 2016-09-30 11:21:41 AM

    Thank you Kris for the straight facts!!!
    I hope you get a great number of readers and have spread more wisdom that so many lack.
    The only winners in a NON 15% FOREIGN TAX are the asian real estste agents and those that already have home ownership, expecting rising equity, only beneficial to themselves! While locking out/destroying Canadian first time buyers.

  • by 2016-09-30 11:48:54 AM

    Welcome to the world of big city living!

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