Finally, we get an official number on foreign buying in Ontario. The Ontario Ministry of Finance released the first set of numbers for the Greater Toronto Area. While the numbers are significant, it’s much lower than previous estimates given by the local board. These numbers are also expected to be revised lower as rebates to the foreign buying tax are given out.
Foreign Buyers Accounted For 4.7% of Sales
The number of foreign buyers estimated in the Greater Golden Horseshoe (GGH) is significantly lower than the Toronto Real Estate Board (TREB) estimated last month. The Ministry of Finance counted 18,282 transactions between April 24 and May 26 in the GGH. The Ministry estimates 4.7% of those sales were by individuals that were not citizens or permanent residents of Canada. That’s up to 860 pieces of property bought by non-residents. TREB had previously estimated 7% in the regions they cover. While the number is significant, it’s still lower than the number of buyers that bought and sold a home in less than 12 months in Toronto.
Subject To The New Non-Resident Speculation Tax (NRST)
These purchases may be subject to the province’s Non-Resident Speculation Tax (NRST). The NRST is a “foreign buyer” tax that non-residents must pay if buying property in the GGH after April 20, 2017. The amount is 15% of the price paid, and is in addition to normal land transfer taxes. The GGH is a new term, and consists of the cities of Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York.
NRST Rebates To Be Given To Some
The province is saying “may be subject,” because there are quite a few people in that number that are entitled to rebates on NRST paid. Rebates are available for anyone working in the province, is considered a permanent resident, or an international student. Bluntly speaking, the province isn’t looking to crack down on anyone that wants to move here – just people that are looking to buy and hold property like gold bars. Once these numbers are factored in, the 4.7% will likely be much smaller.
While the number was relatively small, the impact of the tax is expected to have a large psychological effect on buyers. Shortly after BC rolled out a foreign buying tax, domestic buyers took a wait and see approach. Early numbers from TREB show that Ontario’s buyers may be adopting a similar wait and see attitude before deciding to jump back in (or not).
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Now that we know foreign buyers are a small percentage, can we stop blaming all Asian people and focus on a constructive method to cracking down on prices. Speculators are the problem, doesn’t matter where they are from. We need effective taxes to curb these.
Remember the speculator doesn’t care if you live on the street, they are gambling with the way people live ,You can not win this war on housing the only thing you can do is play there game and buy property anywhere in Canada . If you can’t afford Toronto buy in London Windsor just buy ,
Is the Quebec Immigrant Investor Program still a thing? Wouldn’t the tens of thousands of ultra-rich Chinese who came in through that program now be counted as permanent citizens, and not ‘foreign investors’, even though they are still responsible at massively distorting housing prices?
So it’s 5% even with the tax, which means it must have been higher without it.
That’s a skewed/manipulated number to include areas outside the GTA to bring the average down. In the GTA it’s 10 to 12% and perhaps as high as 20% in areas like Markham.
Are stats for individual areas available?
Are there still loop holes allowing foreign money to be used to buy international students houses? I was told verbally but have trouble backing it up factually that some students enroll and act as money mules to allow foreign interests to buy properties. Can anyone back this up or has heard different? I was saddened to see that foreign students are not being taxed. Why should a foreign student need to buy a home to just go to school here?
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