Toronto is set to become the second city in Canada to impose an extra 15% tax on international purchasers.
The provincial government in Ontario has proposed that foreigners buying properties in the Golden Horseshoe (an area that stretches from the Niagara region and the Greater Toronto Area to Peterborough) should be forced to pay an additional 15% in a bid to keep property prices as affordable as possible for locals.
Kathleen Wynne, the Ontario premier, commented:
“When young people can’t afford their own apartment or can’t imagine ever owning their own home, we know we have a problem. And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.”
With overseas nationals being increasingly blamed for rising property prices, the Canadian government felt the need to intervene. The average price in the Greater Toronto Area rose by a whopping 33% in the last 12 months, pushing the cost of a detached house up to an average of C$1.21 million (around £710,000).
However Wynne was quick to point out that the revenue-neutral tax was not aimed at new Canadians, or people looking to settle in Toronto. “With this tax, we’re targeting people who aren’t looking for a place to raise a family, they’re looking only for a quick profit or a safe place to park their money,” she explained.
And those people who do pay the tax, but end up becoming Canadian citizens or permanent residents, will be eligible for a rebate.
A similar tax was introduced in Vancouver in August, and it had a huge impact on the property market in the Canadian city, with sales taking a steep downturn.