Analysts say that Wynne’s stance is sensible as foreign money is not yet a major player in Toronto real estate
In a statement earlier this week, Ontario Premier Kathleen Wynne assured that her government currently has no plans of implementing a property transfer tax similar to that of the 15 per cent levy slapped by B.C. authorities on foreign buyers.
“B.C. has put in place a particular mechanism; we are not going to use that mechanism,” Wynne told CBC News on October 31.
Experts noted that this was a level-headed stance to take, as overseas nationals are not major movers in Toronto real estate at the moment, amounting to approximately only around 5 to 10 per cent of home buyers in in the city.
In contrast, Fortress Real Developments’ recent survey of the Toronto market revealed that domestic investors have significantly increased over the past few years, and is now standing at around 25 per cent of the buyers of the city’s properties
“I was actually surprised it was that high,” according to analyst Ben Myers. “It's a large percentage of the market and much more concerning than foreign buyers.”
Other observers have raised concerns about the possible repercussions of such a tax, saying that it might prove fatal to Toronto’s housing sector.
“It’s important to our economy to have foreigners investing here. If we cut off the supply it’s going to say Canada is no longer open for business, we’re closed for business, we don’t want your money; that’s going to reverberate throughout the economy,” Toronto-based law practitioner Bob Aaron warned.
“The perception of the tax, rather than the tax itself caused a slump in the market and if we had a slump in the market the default rate in mortgages across the board would be horrible.”
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“B.C. has put in place a particular mechanism; we are not going to use that mechanism,” Wynne told CBC News on October 31.
Experts noted that this was a level-headed stance to take, as overseas nationals are not major movers in Toronto real estate at the moment, amounting to approximately only around 5 to 10 per cent of home buyers in in the city.
In contrast, Fortress Real Developments’ recent survey of the Toronto market revealed that domestic investors have significantly increased over the past few years, and is now standing at around 25 per cent of the buyers of the city’s properties
“I was actually surprised it was that high,” according to analyst Ben Myers. “It's a large percentage of the market and much more concerning than foreign buyers.”
Other observers have raised concerns about the possible repercussions of such a tax, saying that it might prove fatal to Toronto’s housing sector.
“It’s important to our economy to have foreigners investing here. If we cut off the supply it’s going to say Canada is no longer open for business, we’re closed for business, we don’t want your money; that’s going to reverberate throughout the economy,” Toronto-based law practitioner Bob Aaron warned.
“The perception of the tax, rather than the tax itself caused a slump in the market and if we had a slump in the market the default rate in mortgages across the board would be horrible.”
Related Stories:
Foreigner buyers switch targets
Housing affordability summit convenes in Vancouver
