To combat the\nunaffordability of housing, Toronto and Vancouver implemented provincial\npolicies to reduce foreign purchases of Canadian real estate. This has been\ndone primarily through a foreign buyers\u2019 tax. <\/p>\n\n\n\n
Foreign\nBuyers\u2019 Tax in Cities Across Canada<\/h2>\n\n\n\n![\"\"](\"https:\/\/rankmyagent.com\/realestate\/wp-content\/uploads\/2019\/05\/vancouverbill28-1024x512.png\")
<\/figure>\n\n\n\nVancouver<\/h3>\n\n\n\n
Vancouver has\nbeen the poster child for high Canadian real estate prices. And on August 2nd,\n2016, British Columbia decided to intervene by creating an additional property\ntransfer tax on non-Canadian and non-permanent resident homebuyers. This comes\nafter many residents and affordable housing advocates complained that foreign\nbuyers were driving up home prices to unattainable levels. <\/p>\n\n\n\n
Bill 28\nimplemented a tax for non-residents (neither Canadian citizen nor permanent resident)\npurchasing Canadian residential property. This policy only affected the Metro\nVancouver area at first. But in 2018, the foreign-buyers tax was raised to 20%,\nand the area of effect expanded to Fraser Valley, Capital, Nanaimo, and the\nCentral Okanagan Regional Districts. <\/p>\n\n\n\n
This additional\nproperty transfer tax has two exemptions. First, if you\u2019re exempt from regular\nproperty tax, you\u2019re also exempt from the foreign buyers\u2019 tax. Second, if\nyou\u2019re a confirmed B.C. Provincial nominee<\/a> and fit the additional specified criteria,<\/a> you\u2019re also\nexempt. <\/p>\n\n\n\nCertain circumstances<\/a> can qualify you for a\nrefund for the foreign buyer tax, as well. This refund is primarily for those\nwho become a permanent resident or Canadian citizen within one year of the date\nthat the property transfer was registered in the Land Title office. <\/p>\n\n\n\nSince the initial\ntax started in Vancouver, foreign buyers dropped significantly. Before the tax,\n13% of buyers were foreign<\/a> nationals, but this\ndropped to 1% afterwards. A year after (in 2017), the number hovered around\n3-4% depending on the area. Inquiries about Vancouver real estate on Juwai.com,\nChina\u2019s largest overseas property website, declined dramatically<\/a>, while inquiries into\nToronto and Seattle properties subsequently rose. <\/p>\n\n\n\nThis tax, like\nany other tax, has brought in additional revenue for the B.C. government.\nProperty transfer tax in 2017\/2018 accounted for $2.1 billion, which was $266\nmillion more than expected. But while the housing market softened a bit, how\nthe tax has affected home prices was not conclusive at first. <\/p>\n\n\n\n
The Metro\nVancouver housing market in 2019 has slowed down. Newspapers now frequently\nnote home prices below what was seen before the tax. But the foreign buyers\u2019\ntax is only one part of the slow down. Other forms of government intervention\nsuch as the 2018 mortgage stress test also play a role. <\/p>\n\n\n\n![\"\"](\"https:\/\/rankmyagent.com\/realestate\/wp-content\/uploads\/2019\/05\/torontononresident-1024x512.png\")
<\/figure>\n\n\n\nToronto\n<\/h3>\n\n\n\n
A similar bill\nwas then implemented in Toronto on April 21st, 2017 under the name Non-Resident Speculation Tax<\/em>. This\npolicy imposed a 15% tax on non-resident real estate purchases in the Greater\nGolden Horseshoe Region (generally Toronto and the surrounding GTA cities). <\/p>\n\n\n\nThe Ontario\npolicy has three exemptions. Similar to the B.C. provincial nominee exemption,\nOntario exempts you if you\u2019re under the Ontario Immigrant Nominee Program.\nYou\u2019ll have to be applying or certify that you will apply for permanent\nresidency, as well. A protected person (usually refugee protection) has the\nsame exemption. Lastly, if you\u2019re a foreign national who jointly purchases a\nresidential property with your Canadian citizen\/permanent resident spouse, you\nare again exempt from the foreign buyers\u2019 tax. <\/p>\n\n\n\n
If you\u2019ve paid\nthe tax already, certain situations can result in a rebate or refund. This\nincludes becoming a permanent resident within four years of the\npurchase\/acquisition, being an international student enrolled full-time for at\nleast two years from date of the purchase, or being a foreign national working\nin Ontario under a valid work permit. <\/p>\n\n\n\n
In the Greater\nToronto Area, foreign buyers dropped 5.9%, down to 2.1%, after the tax was\nintroduced. A more recent figure<\/a> showed that the pace of\nforeign purchases was much slower than before. Foreign buyers now account for\nonly 1.8% of home purchases in the Greater Toronto Area. However, as a result\nof the tax, the Ontario government brought in $200 million in tax revenue after\nthe first year of implementation. <\/p>\n\n\n\nCalgary,\nHalifax, and Montreal<\/h3>\n\n\n\n
The foreign\nbuyers\u2019 tax has stopped foreign buyers from pursuing residential properties in\nToronto and Vancouver. But this hasn\u2019t stopped buyers from visiting other parts\nof the country. The tax has pushed foreign buyers to other cities such as\nCalgary, Halifax, and Montreal. <\/p>\n\n\n\n
Juwai.com <\/a>found that in 2018 (in comparison to\n2017), interest by Chinese buyers in properties in Halifax increased by 394%,\nCalgary increased by 234.4%, and Montreal increased by 35.7%. In contrast,\ninquiries into Toronto decreased by 10.3%, and Vancouver decreased by 2.8%. <\/p>\n\n\n\nAlthough the increase\nin interest in Montreal pales in comparison to Calgary and Halifax, Montreal\nhas long been a hotspot for Parisian buyers. However, this interest is shifting\nto more and more Chinese buyers. One study<\/a> found that the number of Chinese\nbuyers in Montreal increased by 64.5% in 2018. Additionally, it was found that\none-in-eight condos in downtown Montreal are now sold to a foreign national. <\/p>\n\n\n\nThe\npeople being affected<\/h2>\n\n\n\n
While Parisians\ncommonly look for real estate in Quebec and many Americans invest in Canadian\nproperties to diversify their portfolio, Chinese buyers<\/a> have been the most notable\npurchasers of Canadian real estate. There\u2019s a stereotype that these Chinese\nbuyers are looking for a place to park their money outside of China by buying\nup Canadian property. However, a survey by Juwai.com and Sotheby\u2019s\nInternational Realty found that 41% of Chinese buyers look to Toronto real\nestate for educational purposes. <\/p>\n\n\n\n
<\/figure>\n\n\n\nVancouver<\/h3>\n\n\n\n
Vancouver has\nbeen the poster child for high Canadian real estate prices. And on August 2nd,\n2016, British Columbia decided to intervene by creating an additional property\ntransfer tax on non-Canadian and non-permanent resident homebuyers. This comes\nafter many residents and affordable housing advocates complained that foreign\nbuyers were driving up home prices to unattainable levels. <\/p>\n\n\n\n
Bill 28\nimplemented a tax for non-residents (neither Canadian citizen nor permanent resident)\npurchasing Canadian residential property. This policy only affected the Metro\nVancouver area at first. But in 2018, the foreign-buyers tax was raised to 20%,\nand the area of effect expanded to Fraser Valley, Capital, Nanaimo, and the\nCentral Okanagan Regional Districts. <\/p>\n\n\n\n
This additional\nproperty transfer tax has two exemptions. First, if you\u2019re exempt from regular\nproperty tax, you\u2019re also exempt from the foreign buyers\u2019 tax. Second, if\nyou\u2019re a confirmed B.C. Provincial nominee<\/a> and fit the additional specified criteria,<\/a> you\u2019re also\nexempt. <\/p>\n\n\n\n Certain circumstances<\/a> can qualify you for a\nrefund for the foreign buyer tax, as well. This refund is primarily for those\nwho become a permanent resident or Canadian citizen within one year of the date\nthat the property transfer was registered in the Land Title office. <\/p>\n\n\n\n Since the initial\ntax started in Vancouver, foreign buyers dropped significantly. Before the tax,\n13% of buyers were foreign<\/a> nationals, but this\ndropped to 1% afterwards. A year after (in 2017), the number hovered around\n3-4% depending on the area. Inquiries about Vancouver real estate on Juwai.com,\nChina\u2019s largest overseas property website, declined dramatically<\/a>, while inquiries into\nToronto and Seattle properties subsequently rose. <\/p>\n\n\n\n This tax, like\nany other tax, has brought in additional revenue for the B.C. government.\nProperty transfer tax in 2017\/2018 accounted for $2.1 billion, which was $266\nmillion more than expected. But while the housing market softened a bit, how\nthe tax has affected home prices was not conclusive at first. <\/p>\n\n\n\n The Metro\nVancouver housing market in 2019 has slowed down. Newspapers now frequently\nnote home prices below what was seen before the tax. But the foreign buyers\u2019\ntax is only one part of the slow down. Other forms of government intervention\nsuch as the 2018 mortgage stress test also play a role. <\/p>\n\n\n\n A similar bill\nwas then implemented in Toronto on April 21st, 2017 under the name Non-Resident Speculation Tax<\/em>. This\npolicy imposed a 15% tax on non-resident real estate purchases in the Greater\nGolden Horseshoe Region (generally Toronto and the surrounding GTA cities). <\/p>\n\n\n\n The Ontario\npolicy has three exemptions. Similar to the B.C. provincial nominee exemption,\nOntario exempts you if you\u2019re under the Ontario Immigrant Nominee Program.\nYou\u2019ll have to be applying or certify that you will apply for permanent\nresidency, as well. A protected person (usually refugee protection) has the\nsame exemption. Lastly, if you\u2019re a foreign national who jointly purchases a\nresidential property with your Canadian citizen\/permanent resident spouse, you\nare again exempt from the foreign buyers\u2019 tax. <\/p>\n\n\n\n If you\u2019ve paid\nthe tax already, certain situations can result in a rebate or refund. This\nincludes becoming a permanent resident within four years of the\npurchase\/acquisition, being an international student enrolled full-time for at\nleast two years from date of the purchase, or being a foreign national working\nin Ontario under a valid work permit. <\/p>\n\n\n\n In the Greater\nToronto Area, foreign buyers dropped 5.9%, down to 2.1%, after the tax was\nintroduced. A more recent figure<\/a> showed that the pace of\nforeign purchases was much slower than before. Foreign buyers now account for\nonly 1.8% of home purchases in the Greater Toronto Area. However, as a result\nof the tax, the Ontario government brought in $200 million in tax revenue after\nthe first year of implementation. <\/p>\n\n\n\n The foreign\nbuyers\u2019 tax has stopped foreign buyers from pursuing residential properties in\nToronto and Vancouver. But this hasn\u2019t stopped buyers from visiting other parts\nof the country. The tax has pushed foreign buyers to other cities such as\nCalgary, Halifax, and Montreal. <\/p>\n\n\n\n Juwai.com <\/a>found that in 2018 (in comparison to\n2017), interest by Chinese buyers in properties in Halifax increased by 394%,\nCalgary increased by 234.4%, and Montreal increased by 35.7%. In contrast,\ninquiries into Toronto decreased by 10.3%, and Vancouver decreased by 2.8%. <\/p>\n\n\n\n Although the increase\nin interest in Montreal pales in comparison to Calgary and Halifax, Montreal\nhas long been a hotspot for Parisian buyers. However, this interest is shifting\nto more and more Chinese buyers. One study<\/a> found that the number of Chinese\nbuyers in Montreal increased by 64.5% in 2018. Additionally, it was found that\none-in-eight condos in downtown Montreal are now sold to a foreign national. <\/p>\n\n\n\n While Parisians\ncommonly look for real estate in Quebec and many Americans invest in Canadian\nproperties to diversify their portfolio, Chinese buyers<\/a> have been the most notable\npurchasers of Canadian real estate. There\u2019s a stereotype that these Chinese\nbuyers are looking for a place to park their money outside of China by buying\nup Canadian property. However, a survey by Juwai.com and Sotheby\u2019s\nInternational Realty found that 41% of Chinese buyers look to Toronto real\nestate for educational purposes. <\/p>\n\n\n\n<\/figure>\n\n\n\nToronto\n<\/h3>\n\n\n\n
Calgary,\nHalifax, and Montreal<\/h3>\n\n\n\n
The\npeople being affected<\/h2>\n\n\n\n