Canada : has extended a ban on foreign domestic buyers for an additional two years as the real estate market begins to show signs of a rebound, sparking concerns about the affordability of housing in cities such as Toronto and Vancouver.
Prime Minister Justin Trudeau’s government took action to prohibit non-Canadians from purchasing residential real estate in 2022, with the deadline set to expire on January 1, 2025. This date has now been pushed back to January 1, 2027.
“By extending the foreign buyer ban, we are ensuring that houses are utilized as homes for Canadian families to live in and do not become a speculative financial asset class,” Finance Minister Chrystia Freeland said in a statement Sunday, expressing concerns about residents being priced out of their local housing markets.
The government has made exceptions for non-Canadians purchasing vacant land or residential property for development. There are also exemptions for foreign students and individuals on work permits, provided they have been in the country for an extended period and have not already acquired property.
Activity in the housing market has begun to pick up recently as it becomes clearer that the Bank of Canada may be able to lower interest rates later this year.
The national benchmark home price in December was C$730,400 ($542,500), marking a 36% increase over five years. In Greater Vancouver, it stands at C$1.2 million, and in Greater Toronto, it’s C$1.1 million.
Various levels of government in Canada have implemented measures aimed at cooling housing prices. This week, the Toronto City Council will consider a motion to levy a 10% tax on the residential purchases of non-residents based on the property value. This would be in addition to the 25% “non-resident speculation tax” imposed by the province of Ontario.
Toronto Mayor Olivia Chow’s office did not immediately respond to a request for comment Sunday.
The motion to be considered on February 6 aims to “maintain a level of fairness in the residential real estate market by discouraging foreign buyers from purchasing property in the City of Toronto, especially those buyers who do not intend to reside in the property,” according to a proposal by the city’s executive committee.
