Some communities are wary of possible unintended consequences
While welcomed by most markets, regulations governing foreign buyers might have “unintended consequences” for border communities like Ontario’s Fort Erie, according to local officials.
The tighter rules, which came into effect on January 1, prohibit non-Canadian citizens, non-permanent residents, and foreign commercial enterprises from buying non-recreational residential property in Canada for a period of two years.
Combined with the Underused Housing Tax that was implemented last year, such restrictions could pose a threat to both the economy and the goodwill among transient residents that communities like Fort Erie enjoy, said mayor Wayne Redekop.
“I fear that you and the government do not understand the dynamic of the border that we share with the United States,” Redekop said in a letter addressed to Finance Minister Chrystia Freeland, as reported by CBC News. “Fort Erie’s seasonal residents are not only good friends and relatives… they are important customers of our local businesses. They add a vital element to the richness of life in our community.”
Even as Redekop acknowledged the need to “prevent offshore investors from acquiring Canadian residences and keeping them off the market for those in need of permanent housing,” he also called for a more equitable application of exemptions.
“Our town is a mix of urban and rural areas,” Redekop said. “The seasonal homes within the urban boundaries of Fort Erie are subject to the underused housing tax, [while] those that are located outside our urban boundaries are not… That in itself highlights an unfairness regarding the tax.”
Adrienne Vaupshas, a spokesperson at the Finance Minister’s office, told CBC News that the federal administration intends to stay the course on these policies.
“Our government was elected on a platform that included a national tax on non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, to help address concerns about the impact of foreign investment on housing costs and worries about Canadians being priced out of the housing market,” Vaupshas said. “The government will continue to monitor the impact of this measure.”
