Taxing foreign investors would harm Canada’s image

by Justin da Rosa16 May 2016
Leading real estate veteran argues against measures to rein in foreign investment.
 
“I was asked … if I supported new taxes on foreign investors. I think the answer is you need to be a lot more thoughtful than a yes or no,” Phil Soper, president and CEO of Royal LePage, told REP. “Knee-jerk public policy like a change in taxes for political reasons would be a very sad more for a country known for its tolerance. Brand Canada would be harmed.”
 
Many have argued in favour of the federal government implemented measures to discourage foreign investment in the housing market. It is one factor some speculate is pushing prices to unreachable levels for Canadians in markets such as Toronto and Vancouver.
 
However, such measures would be not be appreciated by Canadians who invest abroad, according to Soper.
 
“I look at the importance of Canadian foreign investors in the American sunbelt residential real estate market during their six year downturn. If it wasn’t for Canadians, many of those communities in places like Phoenix, Las Vegas, California, Florida, would have been shuttered,” Soper said. “But the high Canadian dollar, lower prices, eagerness and marketing focus brought in a lot of Canadian investors.
 
“Guess what, things have tightened up and many Americans may lose a deal to a Canadian. But no one is suggesting a special tax on Canadian investors in American real estate.”
 
And discouraging foreign investment in the housing market could have a wider-reaching impact.
 
“Is the ability to buy a home in Vancouver one of the things that leads to wealthy foreign investors investing in the forestry sector, in mining, in oil and gas, in high tech firms in Vancouver,” Soper said. “Are we hurting another arm of the economy if we slam this door shot?”
 

COMMENTS

  • by Murray Schultz 5/16/2016 1:23:55 PM

    Sorry, don't agree. Canada is not, and should not be, for sale. Imagine if the absolute freedom from scrutiny and taxation we provide to real estate investors in Canada were to be offered by our counterparts in the countries of origin of this incoming capital. It just doesn't exist. Canada's image, as it stands is one of ease of use and little more. I am not convinced that substantial add-on investment component exists for those who purchase real estate in an effort to park their money, as they have discovered that trading $800K and a couple of Canadian jobs in a temporary business, in return for a passport comes up short in comparison. With upwards of 80% of mid to high-end real estate transactions coming directly from Mainland Chinese money in Vancouver's lower mainland, I think it is fair to say that a significant distortion in our real estate market has been the product. Pretending this does not exist fails to protect the people our regulators and politicians have given oath to serve.

  • by Oscar Vidal-Calvet 5/16/2016 1:53:22 PM

    Phil Soper, president and CEO of Royal LePage, told REP. “Knee-jerk public policy like a change in taxes for political reasons would be a very sad more for a country known for its tolerance. Brand Canada would be harmed.”

    I do not agree with Mr. Soper's opinion. For quite some time also I have been saying that "Foreign Investors" should be taxed at a much higher rate of Land Transfer Tax, and if needed a higher Capital Gain Taxes for Non-residents; this does not mean absolutely to harm Canada, all the contrary this is to protect it against international speculators.

  • by Tony 5/16/2016 1:53:44 PM

    Yes it will harm our image of being the money laundering capital of the world. Meanwhile hard working Canadians can't afford a home because Asians with suitcases of cash own our country while government sits on its hands as usual. Typical real estate cartel garbage.

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