Is the foreign homebuyers’ tax cooling the luxury real estate market? There has been triple-digit growth in major cities across Canada in the number of luxury homes and condos. This is a comparison between the first half of 2021 and the first half of 2020. Everything points to this momentum carrying forward, despite any taxes implemented on foreign non-residents.
Luxury Market Statistics
The GTA recorded 414 properties that sold over $4 million in the first six months of 2021. This is up 300% compared to the 103 properties sold in the first half of 2019. Residential sales over $1 million were at 29,394 in the first half of 2021. This is up 240% compared to 8,612 transactions over the same period in 2019. Keep in mind, that a “luxury” home definition is not the same now as it was pre-pandemic due to soaring valuations. Home prices have skyrocketed across Canada pushing a number of properties above the price threshold that’s considered “luxury”. Moving “in tandem” with the broader market, the luxury market shows no signs of halting. It seems even a federal tax on vacant and underused properties on foreign homeowners will not have the effect wanted of slowing down Canada’s luxury real estate market.
New Tax Efforts directed toward Foreign Buyers.
This new tax is expected to yield $700 million in additional revenues over four years. This money will apparently be going towards providing affordable housing for Canadians. British Columbia has a 20% land-transfer tax for foreign buyers. This is alongside an additional speculation levy on empty homes. Ontario’s tax is at 15% in certain cities. With Covid-19 restrictions being lifted, international demand for Canadian housing from foreign investors and immigrants is expected to peak, regardless of the new federal tax. Some housing experts argue government efforts should focus on all investors, domestic and foreign. We agree.
Is the homebuyers’ tax cooling the luxury real estate market? So far, we don’t see this being the case.
To view this full article and all statistics, visit Global News at Canada’s luxury real estate market is on fire. Can the foreign homebuyers’ tax cool it? – National | Globalnews.ca.
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