Foreign investors’ tax would address most of the problem – Tal

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With a weakening loonie and an increasing volume of money from overseas being funnelled into Canada’s real estate sector, Benjamin Tal of the CIBC argued that it is high time for a tax on foreign investors.
 
Tal stated that even though information on the precise role that these investors play remains incomplete, a flipping tax would take care of the “most problematic element of foreign investment in Canadian real estate.”
 
“We don’t know how big it is, but we know it’s not constructive,” Tal told BNN in an interview.
 
“Toronto and Vancouver look very attractive,” he added, alluding to the increasing number of luxury properties in these cities being snapped up by foreign buyers for residential and investment purposes.
 
While exact numbers remain to be seen, foreign money has been tagged by various quarters as a major factor in the staggering growth that has priced out domestic consumers from the country’s housing markets.
 
Among the most prominent movers in this segment are the Chinese, many of which are taking advantage of a mainland program that would allow those worth at least 1 million yuan to invest up to 50 per cent of their wealth overseas.
 
“[There is a] clear sense of urgency among many Chinese residents to send money out of the country,” Tal said.
 
The CIBC deputy chief economist added that the phenomenon of family members already residing in Canada is proving to be a powerful incentive for foreign nationals.
 
“[The] next few years will see even more foreign money entering Canadian real estate markets,” Tal explained. “[Money] comes from outside the country, but family members – mostly wives, children or students – reside in Canada.”
  • Ritebroker on 2016-05-17 10:02:08 AM

    Well said Tal !!!
    Wake up Canadian law makers before it's too late. If you continue to sleep, a crisis of domestic consumers being priced out from the country’s housing markets is inevitable and many many will be at the mercy of renting from Foreign landlords. Currently government is assessing new measures to tax us Canadians more, how about a hefty Taxation for Foreign Real estate investors.

  • Al on 2016-05-17 10:06:08 AM

    Unbelievable! Tax, Tax, Tax.... As if more taxes will solve a problem. Will it be given to Canadian citizens who purchase homes to reduce their purchase price? I doubt it - and the cost to administer new taxes always takes away any percieved benefit. if foreigners have millions of $$$$ to invest any tax amount would seem insignifcant to them, especially since they feel their money is safer being here.

  • Wolfram on 2016-05-19 9:44:04 AM

    Al, in this case Taxation at the right level is the viable solution. Tal is spot on on this one.

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