Not even the promise of a new national tax on foreign homeowners may be enough to chill a Canadian housing market that has been showing signs of warming up again.
Liberal leader Justin Trudeau triggered an election campaign this week, and his party has already vowed that if re-elected, they will “address the impact of foreign speculation, which drives up housing costs.” To do so, the Liberals say they would implement a one-per-cent speculation and vacancy tax on applicable residential properties owned by “non-resident, non-Canadians.”
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The new tax would be in addition to measures the housing market has already been digesting, such as a stress test for uninsured mortgages and foreign-buyer taxes in British Columbia and Ontario. Those measures, along with higher interest rates, helped put a damper on real-estate activity.
“Further analysis of regional markets across the country is required to understand if a new speculation and vacancy tax will help increase the supply of available housing over the long term or aid with affordability,” the Canadian Real Estate Association said Thursday.