A roundup of opinions about a Toronto 15% foreign tax

by Justin da Rosa26 Sep 2016
A number of industry stakeholders have had their say – including our own readers.

It seems a tax on foreign buyers in Toronto is imminent, following the influence of Vancouver’s own that went into effect last month. A number of industry players have already weighed in and so can you. Click here to take the poll.

For the tax
Joe Oliver, former Minister of Finance

In a commentary written for the Financial Post last week, the man formerly tasked with presenting the country’s budget and overseeing the Bank of Canada came out in favour of taxing foreign buyers in Toronto.

He cites, among others, the influence B.C.’s tax will have on foreigners who will instead choose to park their money in Canada’s largest city.

“Foreign, especially Chinese, buying is often motivated by finding a safe place to hedge against geopolitical risk. Political tension in China has elevated that perceived risk, resulting in capital flight,” Oliver wrote. “The obvious implication of the B.C. tax is that high-end foreign buyers, attracted to Canada’s stable political environment, will gravitate to the GTA where housing is substantially less expensive than in Vancouver.”

Against the tax
Ontario’s real estate groups

Both the Toronto Real Estate Board and the Ontario Real Estate Association have argued the negatives.

Heads of both those institutions have sent letters to Ontario’s Finance Minister Charles Sousa and Toronto Mayor John Tory, according to the Globe and Mail, decrying a potential Toronto tax.

“Increasing taxes on foreign home buyers is a knee-jerk reaction to a problem which we do not fully understand, will do little to address the growing affordability challenges facing many Ontarians and may have negative consequences for our broader economy,” Larry Cerqua of TREB and Ray Ferris of the OREA wrote in their letter to Mr. Sousa, per the Globe.


  • by T.C.S 9/26/2016 10:47:51 AM

    I think that they have to be cautious with how it is implemented. They cannot do the quick knee jerk reaction they did in B.C. Set a start date when all new transactions will get affected. Also it would be more prudent to increase the tax on the sale of a property that a foreign owner has. Create an ownership scale that dictates a higher capital gains tax within certain time periods of ownership. If they own for 0 to 5 years they are taxed at a rate of 50 %. this will reduce the flip mentality. As well do not allow foreign investors to assign transactions. they must close and take title, this way the government will not have to chase the builders to get original sale documents.

    The market may self cool on its own, so caution has to be exercised here. This could force an artificial cooling that will have more of a negative affect. The actual numbers of foreign investors may be lower in the GTA market then some people believe, so lets get the real numbers before moving forward.

  • by Bob Edwards 9/26/2016 10:54:11 AM

    This is a very ill advised tax.Foreign investment creates good high paying jobs. Our foreign investment in the GVRD dropped from over 2 billion in the month or so before the tax was announced to 17 million in about a month after. Foreigners searching to buy in Vancouver has dropped by over 90% yet searches by foreigners looking to invest in Seatlle increased over 100 percent at the same time. Capital will always go where it is appreciated. Our BC governments stupid tax and the loss of billions in investment is going to create a lot of jobs in Seattle and other investment friendly cities.

  • by TH 9/26/2016 11:08:17 AM

    How about affordability?
    Our young generation is nearly doomed to be able to ever own their own home in Toronto and even more so in Vancouver.
    Not sure if the foreign tax is the answer to this problem, but clearly something has to be done before most of our youth will be tenants in real estate owned by foreign investors.

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