Ban on Foreign Buyers to Be Included in Federal Budget: Reports
It would appear the Federal Liberal government will indeed be shutting foreign buyers out of Canada’s housing market.
According to reporting by CTV National News Ottawa Bureau Chief Joyce Napier, a two-year freeze on residential purchases made by foreign nationals will be revealed in tomorrow’s federal budget.
Allegedly, the ban will include all home types, from condos to single-detached houses. However, it will not extend to foreign nationals purchasing a primary residence in Canada, permanent residents, or foreign workers and students. As the new policy would be legislated, the government would be able to enact judicial powers to crack down on non-compliance.
The ban would be a making good on one of the Libera’s election-time campaign promises, which also included pledges of an anti-speculation tax, and other measures to stem rampant real estate price growth.
Another high-profile aspect of tomorrow’s budget, according to CTV, is the introduction of a new “tax-free First Home Savings Account” expected to help first-time homebuyers under the age of 40 in Canada save up to $40,000 toward their first purchase. In total, the entirety of the budget dedicated to housing initiatives over the next five years is presumed to be in the $10B range.
CTV also reports other housing measures will include:
- $4 billion to help municipalities update their zoning and permit systems to allow for speedier construction of residential properties;
- $1 billion for the construction of affordable housing units; and
- $1.5 billion in loans and funding for co-op housing.
A request from STOREYS for confirmation of the policy from Minister of Housing, and Diversity and Inclusion Ahmed Hussen, was not answered by time of publishing.
That a foreign buyer ban is allegedly to be included is somewhat of a turnaround from a recent Standing Committee on Finance vote, which shot down a Tory-led motion to amend the Underused Housing Tax Act to allow the banning of foreign purchases.
However, it remains unclear the extent foreign homebuyers and investors truly have on the Canadian market, a criticism that arose last week, when the Ontario government announced an increase to the province’s Non Resident Speculation Tax from 15% to 20%, and expanded its reach from just the Greater Golden Horseshoe.
Official data on foreign buyers’ presence is minimal with the most comprehensive from StatCan’s 2018 Canadian Housing Statistics Program, which reports non-resident ownership of housing is just 2.2% in Ontario, the nation’s largest housing market.