While acknowledging that some measures to cool down Toronto’s runaway housing market need to be implemented, a national group of mortgage professionals expressed hesitation at the various proposals calling for a foreign buyers’ tax in the GTA.
“It is un-Canadian to blame foreigners for affordability concerns caused by lack of supply in the market,” Mortgage Professionals Canada said recently, as quoted by BuzzBuzzNews.
“Imposing a foreign buyers’ tax does nothing to solve a lack of supply and could create adverse effects on the national, provincial and regional economies.”
The organization joins a wider coalition of voices—which includes developers, real estate agents, and current Ontario Real Estate Association president Tim Hudak—against the imposition of such a tax.
More importantly, an additional levy on residential property purchases in the GTA would make it difficult for the Ontario government to balance its 2017-18 budget if the tax ends up stifling sales activity. The province’s land transfer tax in 2016 added $514 million to its coffers.
MPC pointed at Vancouver as a case study of what and what can’t a foreign buyers’ tax achieve. B.C. imposed a 15 per cent levy on non-resident buyers of homes in mid-2016.
“A foreign buyers’ tax has not improved affordability and has instead simply reduced housing activity,” MPC said—an assertion corroborated by the latest numbers from the Real Estate Board of Greater Vancouver, which found that only 3,666 homes were listed for sale in Metro Vancouver, representing the lowest February supply since 2003.
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