New rules include tighter mortgage insurance eligibility requirements and an end to the tax breaks for foreign buyers
The introduction of new federal rules governing mortgage won’t prove to be much of a concern for Canadian companies who are looking at hiring foreign talent, according to observers.
With Finance Minister Bill Morneau announcing the regulatory changes on October 3, eligibility requirements have become stricter in response to the supposed negative impact of foreign buyers on Canadian home affordability, GlobalNews.ca reported.
Among Morneau’s measures are the closing of tax loopholes for capital gains exemptions on principal residence sales—which have allegedly contributed to the overheating of the housing markets of Vancouver and Toronto by allowing unscrupulous foreign buyers to purchase Canadian properties and then sell these at a profit.
“These policies are really targeted towards people who are buying homes but not living in them,” according to Walid Hejazi, an international business professor at the University of Toronto’s Rotman School of Management.
The analyst emphasized, however, that the new measures are effective nationwide, and thus might prove to detrimental if housing prices somehow plummet dramatically (which would make owners lose out big time on the value of their properties).
“It would be a big problem,” Hejazi said. “Governments need to manage this very, very carefully.”
BC Tech Association president/CEO Bill Tam stated that he and his organization are anticipating no problems stemming from the tightened rules.
“I think anything that provides further stability in the market — where we can actually sort of ease the affordability challenge — is probably something in the long-term that benefits the tech sector here, and probably on a national basis,” Tam said.
Related Stories:
New housing measures announced
Banks implement stricter mortgage application rules
With Finance Minister Bill Morneau announcing the regulatory changes on October 3, eligibility requirements have become stricter in response to the supposed negative impact of foreign buyers on Canadian home affordability, GlobalNews.ca reported.
Among Morneau’s measures are the closing of tax loopholes for capital gains exemptions on principal residence sales—which have allegedly contributed to the overheating of the housing markets of Vancouver and Toronto by allowing unscrupulous foreign buyers to purchase Canadian properties and then sell these at a profit.
“These policies are really targeted towards people who are buying homes but not living in them,” according to Walid Hejazi, an international business professor at the University of Toronto’s Rotman School of Management.
The analyst emphasized, however, that the new measures are effective nationwide, and thus might prove to detrimental if housing prices somehow plummet dramatically (which would make owners lose out big time on the value of their properties).
“It would be a big problem,” Hejazi said. “Governments need to manage this very, very carefully.”
BC Tech Association president/CEO Bill Tam stated that he and his organization are anticipating no problems stemming from the tightened rules.
“I think anything that provides further stability in the market — where we can actually sort of ease the affordability challenge — is probably something in the long-term that benefits the tech sector here, and probably on a national basis,” Tam said.
Related Stories:
New housing measures announced
Banks implement stricter mortgage application rules
