Councilllor floats idea of foreign buyers tax in Toronto
Scarborough councillor Jim Karygiannis has commissioned a city-wide poll on the idea of a foreign buyers tax.
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A Toronto councillor is raising the spectre of a foreign home buyers tax, but experts say the surcharge would do little to solve the city’s affordable housing problem.
Ward 39 councillor Jim Karygiannis has commissioned a city-wide poll to see if Torontonians support charging foreign real estate buyers an extra tax.
Vancouver recently implemented a similar tax. Policymakers hope it will help curb skyrocketing home prices.
Karygiannis says he’s just “testing the ground,” but once all the results are in he’s considering drafting a motion to council in support of the tax.
“If you want to invest somewhere where you can make jobs and you can create employment and help the economy fine,” he told Metro.
“But if you’re only investing to pull out money because of a situation, I don’t think a lot of people would have sympathy for that.”
Even if Karygiannis’ poll shows support for the surcharge, Toronto real estate lawyer Bob Aaron says the city doesn’t have the authority to levy it; that power lies with the province, he said.
Aaron said any such a tax would send “the wrong message,” that Ontario is closed for business and doesn’t want foreign investors of any kind.
According to the Canadian Mortgage and Housing Corporation’s latest figures, the share of foreign ownership in Toronto is less than two per cent of buildings completed before 1990 and seven per cent for buildings completed since 2010.
Mark McLean, a Toronto real estate broker and past president of the Toronto Real Estate Board, doesn’t think foreign buyers are making it any harder for people to buy houses.
“The reason prices are going up is this is a great city to live in,” he said. “It’s purely supply and demand.”
Toronto’s vacancy rate is already low, and McLean said a tax on foreign buyers could further reduce rental stock. Many foreign investors buy real estate to rent it out, he said.
After Vancouver implemented a tax on foreign buyers, some economists questioned whether foreign capital would simply move to Toronto, driving prices up.
However, McLean said it’s too early to tell if that’s the case.
“To suggest that the tap shuts off in Vancouver and then opens in Toronto, it’s just ill conceived, ill informed,” he said.
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