Toronto is set to follow in Vancouver’s footsteps with its own tax for foreign property buyers.
The Canadian city is one of the most active, and tightest, housing markets in the country. Sales activity in March was up 6.6 per cent across Canada, according to the Canadian Real Estate Association, with Greater Toronto Area leading sales increases. That increase offset a decline in the Greater Vancouver area, after the region introduced a tax last year to cool down its hot market and deter overseas speculative investment.
Now, as experts speculate whether Toronto will become the new foreign investors’ favourite (prices rose in the 30 per cent range year-on-year in Greater Toronto and Oakville Milton), the city has announced that it will introduce its own levy for non-resident investors.
Ontario Premier Kathleen Wynne announced the 15 per cent tax this week, alongside expanding rent control measures and a charge on vacant homes.
The new levy will apply to buyers active in the area from Niagara to Peterborough, if they are not citizens, permanent residents or companies registered in Canada. The tax, once officially introduced, will be retroactively applied to transactions from today, 21st April 2017.
Immigrants, however, will not be penalised by the tax, with a rebate available to anyone who subsequently acquires citizenship or permanent residency, as well as international students and foreign nationals working in Ontario.
“The non-resident speculation tax has nothing to do with new Canadians and people who want to make Ontario their home. With this tax, we are targeting people who aren’t looking for a place to raise a family — they’re looking only for a quick profit or a safe place to park their money,” said Wynne.
Toronto will also introduce rent controls, which currently only applies to units built before 1991. All private rental homes will fall under an annual rent increase guidline.
The measures form part of a package of 16 housing proposals, which will include a rebate for developers building homes for rental construction, and also a review of estate agency procedures and regulations.
Chinese property investors turn to Seattle and Toronto
13th December 2016
Chinese investors are turning to Seattle and Toronto in the months following the introduction of Vancouver’s foreign buyer tax.
We asked the question last month whether the tax would have a notable impact upon investment trends in Canada’s property market, and where investors might turn instead of Vancouver. According to Juwai.com, Seattle may be the answer, with enquiries on the Chinese portal more than doubling in November 2016.
Interest in Seattle rose 140 per cent year-on-year, 78 per cent in October, 93 per cent in September and 63 per cent in August. Vancouver, on the other hand, saw enquiries dip 80 per cent in August 2016 and 25 per cent in September.
Matthew Moore, President of the Americas for Juwai.com, comments: “One reason the November stat looks high is that November 2015 was just one of those months where the number of inquiries wasn’t particularly high. The secret is out. Seattle’s a great place to live. Even the Chinese know it. There is no question that the tax in Vancouver is displacing some buyers to Seattle. How long will it go on? That depends in large part on what happens north of the border. If Vancouver stabilizes or comes roaring back, you could see interest in Seattle decrease.”
Toronto also saw demand increase, with enquiries jumping 60 per cent in August and 80 per cent in September. On TheMoveChannel.com, Toronto became one of the Top 50 most searched-for locations in Q4 2016, Canada’s first city to be included in the portal’s quarterly Hotspots Index.Google+