Two weeks ago, the Government of British Columbia (BC) introduced a new 15 per cent land transfer tax on foreign buyers of residential real estate in that province. The tax was introduced with no consultation and virtually no notice. As Ontario considers measures to address the growing affordability challenge in our province, OREA urges all levels of the government to be cautious as they consider actions to intervene in the housing market, such as a tax on foreign buyers.
With respect to foreign activity, Canada and Ontario lack a wealth of good data or information. Before the Ontario government intervenes in the provincial housing market, we urge it to gather more information on the size and scope of foreign activity in the provincial housing market. With the exception of Toronto, there is no data that exists regarding foreign activity or ownership in provincial real estate markets. Even in Toronto the picture is far from complete.
OREA is concerned about the lack of relevant data and information on the size and scope of foreign activity in the residential market. Major policy decisions, like significant tax increases on a very important sector of our economy, should not be made in the absence of relevant data. Increasing taxes on foreign home buyers is a knee-jerk reaction to a problem which we do not fully understand.
As experts in the housing market, REALTORS® know that home ownership continues to be top of mind as a quality long-term investment for Canadians. But as governments look to address the issue of housing affordability, OREA encourages them to take a broad approach that looks at both supply and demand issues.
OREA will continue to monitor any developments on the issue of a tax on foreign buyers of property. OREA will also contribute to the Government of Canada’s upcoming National Housing Strategy consultation on behalf of Ontario REALTORS®.