Ontario may change course on foreign buyers' tax
Last year, when British Columbia responded to market chaos by instituting a foreign buyers' tax on home purchases, Ontario showed no signs of following suit. Being a central province and not nearly as susceptible as BC was to the competition of wealthy Asian buyers coming from directly across the Pacific, the strategy of letting market forces prevail seemed like a reasonable course of action to take.
Now, however, it looks like a different approach could be in the cards for Ontario. Finance Minister Charles Sousa indicated on Thursday that he has been reconsidering a foreign buyers' tax as a potential option for controlling the aggressive growth that has been reflected in the price of homes.
A major reason for this re-evaluation of the policy is that the price boom has only worsened in recent weeks. February data revealed that detached-home prices in the Greater Toronto Area jumped by over 30 per cent over the last year.
While that kind of information may lend itself to the belief that any type of intervention that can be made should be made, some would vehemently disagree. Sotheby's CEO Brad Henderson said that foreign buyers' are such a miniscule part of Ontario's housing problems that curbing their flexibility would be a highly misguided move.
"Our view is that it's the wrong policy approach because the presumption is that the foreign buyer is the one driving prices up in Toronto and that's not the case—no facts support that that's the case," Henderson said.
Former Ontario Conservative party leader Tim Hudak—and current CEO of the Ontario Real Estate Association—had a similar view of matters.
"The main culprit behind rapidly rising house prices is the GTA's unbalanced market - housing supply cannot meet demand - not foreign buyers," Hudak said.