Ontario real estate associations oppose taxing foreign buyers in Toronto

Of the total number of transactions, the proportion of foreign purchasers who closed their deals to buy homes in the Vancouver region was 0.9 per cent between August 2 and August 31, down from 13.2 per cent in the seven weeks leading up to the implementation of the tax, according to data based on land-title registrations the province released on Thursday.

Real estate transactions involving foreign nationals decreased by 97 per cent across Metro Vancouver, from 1974 for June 10 to Aug. 1 to just 60 property sales for Aug. 2 to Aug. 31.

In total, 24.7 per cent of residential property transfers (or 310 out of 1,257) involved a foreigner, prior to the 15 per cent tax being levied against those who are not Canadian citizens or permanent residents seeking property in Metro Vancouver.

But ministry numbers also show declines in real estate transactions involving foreign nationals since the introduction of the foreign buyers tax.

Earlier this week, Vancouver’s City Council voted to move forward to public consultations on a proposed tax on empty homes in the city. This is equal to more than 55% of all transactions registered in Metro Vancouver on that day, and nearly 40% of the total foreign investment in Metro Vancouver residential real estate for the entire period after data collection began and before the additional tax took effect (June 10-August 1).

From June to the end of August, purchases by foreign buyers totalled 9.3 per cent in Vancouver, down from 13.2 per cent between June and the beginning of August.

Commenting on the figures, Premier Christy Clark told CBC, “I think it is fair to say we have had an impact”.

In letters to Ontario Finance Minister Charles Souaa and Toronto Mayor John Tory, the heads of the Toronto Real Estate Board and the Ontario Real Estate Association say introducing such a tax would be “a knee-jerk reaction to a problem which we do not fully understand”. In Metro Vancouver, 2,034 transactions involved foreign nationals during that period.

Initial data showed 90 per cent of all foreign purchasers in Metro Vancouver were Chinese nationals. She added that her “hope is that many of those units that would have sold to foreign buyers, will now be sold to British Columbians”.

A Conference Board of Canada real estate report Thursday found property transactions dropped in 17 of 28 markets in Canada between July and August, with the largest declines in Vancouver and the Fraser Valley. The data indicates foreigners were buying fewer, cheaper properties and with less of a share in the sales. The information available is a small sample size and the two periods cover different lengths of time.

In Greater Victoria, there was a total of 1,214 property transfers in August worth $739 million, a drop from the 2,280 transfers worth $1.3 billion in the previous 51-day period.