Residential Market Commentary - week of September 26, 2016
Sep 26, 2016, 16:15 PM
British Columbia’s foreign buyers’ tax continues to draw attention. A student from Burnaby is launching a class action lawsuit against the provincial government. Among her arguments: the provincial tax violates international, federal trade agreements.
The lawsuit is just one more aspect of the tax being watched in Ontario. The province is expected to implement its own tax, in an effort to cool the Toronto market. One of Canada’s best known economists says Ontario does not, really, have a choice. Benjamin Tal says both Toronto and Vancouver suffer from a shortage of land for single family homes. He notes, though, that Toronto’s supply shortage is caused by provincial policy. Tal says, unless that policy changes the only tool the government has is a tax to temper demand.
There are indications B.C.’s tax may be driving foreign buyers to Toronto. Still, the heads of the Toronto and Ontario real estate boards oppose a foreign buyer tax. They argue the extra expense could push foreign buyers out of the high-end market, creating even greater demand pressure for lower priced homes. They also say a Toronto-specific tax would simply shift the problem from the city to the suburbs.