Many people have speculated on what effect the nonresident tax would have on key real estate markets. The Ontario government has presented figures from the period between Aug. 19 and Nov. 17, a period following the imposition of the 15 percent foreign buyers tax. These numbers show that the number of people and corporations who are not based in Canada purchasing real estate in the Greater Golden Horseshoe region has decreased substantially.
During this period, foreign corporations and people who were not Canadian citizens or permanent residents were responsible for 1.9 percent of real estate transactions in the Greater Golden Horseshoe region. This is a decrease of 3.2 percent from the previous three months. Toronto had a higher percentage of foreign investment at 3.8 percent of transactions, but this also decreased from 5.6 percent the previous three months.
Ontario’s Finance Minister notes that the foreign buyer tax along with expanded rent controls may be helping to cool the market based on these figures. He says that home resale prices are moderating in many parts of Ontario. The province has collected about $133 million from the tax since it was put into place in April 2017, though some of this is subject to rebates if buyers get citizenship or permanent resident status.
Several housing policies were put in place to temper the Ontario real estate landscape. Regardless of their effectiveness over time, real estate buyers and sellers should be aware of them as they consider future transactions. Those who need legal guidance for a real estate purchase or sale should contact a lawyer.
Source: CTV News, “Foreign buyer home purchases declining in Ontario region covered by non-resident tax“, Dec. 20, 2017