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Former Finance Minister Joe Oliver penned his opinion for the Financial Post Thursday, imploring policymakers to institute a similar home sales tax in Toronto to the one recently passed in Vancouver.
“I’ll admit I am outside my comfort zone in recommending a tax hike. However, I have always taken a pragmatic rather than ideological approach to fiscal policy and what I’m about to recommend is not a tax on Canadian residents,” Oliver wrote. “So, here goes. The Ontario government should quickly impose a 15 per cent tax on purchases by non-residents and foreigners of residential property in certain Greater Toronto Area (GTA) communities.”
Oliver’s piece appeared on the same day it was reported Vancouver’s tax had helped curb foreign purchased of real estate.
According to a statement by B.C.’s Ministry of Finance, released Thursday, a rush of foreign buyers flocked to the market prior to the Aug. 2 deadline. Interested petered off significantly following, however.
The Ministry claims 55% of residential home purchases in Metro Vancouver involved foreign nationals on the last business day, July 29, prior to the deadline.
And with the sales tax seemingly having its desired effect in Vancouver, it may not be long before Toronto policymakers take a page out of the same book.
Before – and, indeed, when – Toronto sees its own tax, Joe Oliver has some suggestions for policymakers to consider.
“I would time the implementation differently than in B.C. The tax should take effect the instant it’s announced, rather than giving buyers eight days to skirt it,” he wrote. “Also, it should not apply retroactively to transactions that were signed but not closed, which is fundamentally unfair.”
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A 15% foreign sales tax may be imminent in Toronto – at least if one former Finance Minister has his way – so we want to know: Would that be a good or bad thing for the market?