As housing market undertakings go further than normal market rudiments, it is very common for the provincial and national government to take action to address the situation and undoubtedly, a limitation on foreign investors is not a strange move to be taken.
Conversely, in the Canadian real estate market, rules impeding foreign investors from buying homes across leading Canadian housing markets are becoming predominant.
Swift foreign investment limitations started to come into the limelight once again as a result of luxurious home prices coupled with a rise in land values in Canada’s leading real estate markets. This provoked two provincial governments to make moves against these investors. It is only governments that are taking such actions to address the urgent housing situation, it is however not a surprising action.
To tackle the high home prices enigma in Metro Vancouver, the British Columbia government in July 2016 introduced a 15% tax on foreign investors. Nevertheless earlier this year, an absolution was made on the taxed foreigners who had existing working permits and were paying current tax. Although this move was not favored by the Ontario government with claims that the tax will affect other neighboring markets. The tax was adopted in April this year as a result of continued price growth in the Greater Golden Horseshoe as part of its Fair Housing Plan.
Toronto and Vancouver housing markets are a great desirability for foreign investors especially those from China.
Then again, there were also worries over the effects of the tax as it was most likely that the tax would affect other housing markets that do not implement it.
Reports from the Sotheby’s International Realty Canada in partnership with Juwai.com a Chinese property website pointed out that queries of foreign investors in Vancouver’s housing dropped significantly following the announcement of the tax in July. However in other cities such as Calgary, Toronto and Montreal, the search by foreign investors increased, though the home sales in these cities remained moderate.
Putting a limitation on foreign buyers is not a new approach as countries including Australia, Britain, Hong Kong, Singapore and Switzerland have also implemented parallel related restrictions as well.
J C Loum