The government of Ontario announced measures of controlling the house bubble in Toronto and its surrounding areas and subsequently added a 15 per cent tax on foreign buyers to help ease the bubble including corporations.
These decisions were made to control the number of Chinese investors who think Toronto or anywhere outside china is an asset expressed in foreign currency but these homes also do offer benefits in times of inconvenience perhaps in China.
This measure was also implemented by the British in Colombia last year August to control the house bubble in Vancouver that keep escalating; it later effected to freezing the market with home sales rapidly decreasing.
But the reason why this same measure was adopted in Toronto is rather obvious that because of the 15 per cent tax on foreign investors, the attention of Chinese investors took a different turn to Toronto. Every march, Toronto realizes a 33 per cent increase of all house types and this is an unreasonable fact.
“It’s about time we remind folks that prices of houses can go down as well as up. People need to ask themselves very carefully; why am I buying this house?” said the Governor of the Bank of Canada Stephen Poloz as the housing industry has gushed feverishly hype and no fundamental story could justify the high price inflation in Canada, but instead a blame was casted on the growing role of speculation saying anything that’s growing and fast enough is vulnerable to corrections and 15 per cent tax is part of the correction procedure with other 25 other measures.
The 15 per cent tax on foreign buyers entailed that those who are not permanent residents of Canada or are not citizens of Canada and also to foreign corporations that buy residential properties of 1 to 6 units in the greater Toronto and Hamilton area plus surrounding regions are to give a 15 per cent tax but this measure isn’t applicable nominees and refugees.