Federal tax on foreign real estate investors is on the horizon
Tuesday Nov 05th, 2019Share
According to Blacklock's Reporter, the federal government is expected to pass it's first-ever speculator tax on Canadian real estate. This comes on the heels of a B.C. Supreme Court ruling, which rejected a constitutional challenge on a similar tax in that province.
During last month's election campaign, Prime Minister Justin Trudeau promised to impose a 1% tax on real estate owned by non-resident, non-Canadians. The aim is to "to limit the housing speculation that can drive up home prices" according to the Liberal Party platform. With the NDP campaigning on similar measures in an attempt to reign in skyrocketing real estate prices in some major cities, the legislation, once it is introduced in the minority Parliament, is expected to pass with support from the NDP.
The tax will apply to all residential real estate in Canada, owned by non-Canadians, including corporations and trusts. Exemptions will be given to homes that are rented out to tenants who are not immediate family.
In an attempt to control prices in some major cities, governments in B.C. and Ontario have imposed similar forms of taxation on a provincial level. Recent changes in mortgage rules, introduced by the federal Liberal government, have also seen an impact on housing demand and prices.
Saskatchewan currently does not have a provincial speculator tax in place.