CBC Forum: How should Canada regulate its housing market to foreign ownership?
The Canada Mortgage and Housing Corporation says it has been in contact with police agencies that track money laundering and tax authorities in order to beef up its data collection on the impact of foreign buyers. How should Canada regulate its housing market to foreign buyers?
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Canada should regulate its housing market by forcing strict occupancy requirements for those who wish to purchase a Canadian home. I.e. you must live in the house X months each year. _OR_ eliminate limit foreign ownership to condo's or only 'professionally managed' residences. -
We should do it like the Swiss. On price for people that live and work here. Another price completely for those who are just playing with their 'portfolio'. -
(1) Seize all foreign owned residential property. (2) Make Canadian citizenship a requirement to purchase residential property.(3) Lower the artificially over-inflated housing prices (4) CANADIANS HAVE THE RIGHT TO PURCHASE AFFORDABLE RESIDENTIAL PROPERTY.
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Thanks for opening up this forum CBC. This is an important conversation for all Canadians, as potentially foregone tax revenue at the Federal level (in the form of forfeited capital gains tax or even possibly fully taxable income for foreigners in the business of flipping Canadian property) increases the tax burden on other Canadian taxpayers.
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This is a very hard thing to do, in a free an open democracy like ours. For instance, if someone set up a corporation in Canada, this is then a Canadian entity - and can have a Canadian board of directors. How do you differentiate this from a Canadian owned corporation - which also has Canadian directors. And then to make it harder - say the company was owned by Canadians - and then sold it to foreigners - which is a private deal, which does not have to go through any land titles registry - and in fact, does not have to get registered anywhere.
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As a mid-30 year old Canadian business owner with ample money in savings that makes a decent living, it's a shame I can't afford to purchase a home in the neighbourhood I grew up in (in a suburb north of Toronto).
My wife and I rent, and most of our neighbours consist of empty homes bought by foreigners. -
Solutions:
(1) Canadian Citizenship required to purchase property
(2) Requirement for all purchases to put their full legal name and government issued ID number on their "Purchase of Sale Agreement" to help better track who these people are.
(3) Automatic investigation of anyone purchasing a home for over $1.5M to see if funds were illegally obtained. -
First we need some concrete information before making a judgement or coming up with rules.
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The Werewolf writes:
"We regulate almost every other kind of investment in Canada. I'm not sure why people argue the real estate market should be different. If anything, given the history of disasters linked to the housing market (no one remembers 2008?) and given that this affect people directly not to mention affects larger, complex issues such as urban planning, I'd say MORE regulation, not less, is logical." -
There's a commenter who's trying to get through. Your comments are fine, but I need you to change your name. Sorry.
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Any solution implemented will need to be retroactive to make any difference whatsoever. To correct housing prices you need to have three things happen. 1. raise interest rates 2. outlaw shadow flipping and discourage any speculation with massive taxes on it 3. severely tax foreign owners at least 50% of the assessed value unless they can prove residency at least 6 months a year. -
how should we regulate the market ---??
that's a leading question ----not permissible ---
the market does not need to be regulated ---beyond --buyer/seller -done deal ---after that if they pay the taxes ---welcome to canada -
You can talk and talk and talk about it. Unfortunately, there's not a whole lot as a practical matter that can be done about it.
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Levy a tax on "under-occupied" residences. Collect data from utilities providers which should strongly indicate whether a property or unit is actually occupied. If you are not an active participant in our economy (either by living in the home you own or renting it to a tenant) then you should bear the "opportunity cost" to our economy. By which I mean the following: Had another person acquired the property as a residence, they would be an income, payroll and sales tax-paying member of the community. You as a non-resident, non-participant give nothing back to Canada.
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Not only should foreign ownership be regulated but also speculation. This market is buoyed by local as well as foreign speculation. As long as we have an affordability crisis and locals can't live in homes or rentals at a reasonable cost, speculation needs to be curbed. It is a problem when average houses in the suburbs are starting to sell for over a million. Where do the workers go? Not everyone can just up and go to another province. In North Vancouver you cant' buy a house under 1,2 million. Regular houses are selling over 1.5m and climbing every month. Every open house I attend 2/3 of the people showing up are what seem to be foreigners, sometimes its developers looking to tear down and build new to sell to foreigners. Canadians should have first crack at housing in their own cities. We sold our house last spring to downsize because my husband is retiring. We did not profit hugely because we sold before it went really crazy. We cannot find anything to downsize to that would also let our children live there until university is finished. We would now need to pay more than our house we sold to downsize!! How messed up is that!
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there are many factors, it should be a fair playing field for everyone. the govt has a duty to ensure foreign funds are taxed and regulated and ensure the sources are legitimate.......how else does Joe average compete with millionaires globally on 70K salaries? other countries do not permit rich westerners to waltz in and buy up their land for the very same resons - as you can now see families and l
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There's no reason to regulate foreign ownership. Why would we dissuade investment in this country? There are tens of thousands of jobs being created in the construction industry. We don't need some interventionist political agenda messing up free enterprise, based on "folk lore" surrounding foreign ownership.
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High Density Zones should be established whereby, based on an objective set of criteria, no new foreign ownership may occur in these areas unless they spend 183 days at that residence (making it their primary residence). Criteria could include economic reasons (housing market is unsustainable) or limited land availability for new builds (like Vancouver) etc
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In overheated markets, ban it. To encourage enforcement, property will be seized for anyone caught getting around the rules. Severe penalties & fines, otherwise governments won't bother enforcing it.
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I'm not convinced that all the money is foreign, and I don't think that it should make a difference.
Whether you are from Hong Kong or West Vancouver, if you're buying houses simply as an investment hedge, you are affecting the ability of people who need housing.
Urban areas are different from recreational areas where a "vacation home" is not unreasonable. Housing is for living, not flipping or renting by the week. -
Government action on this file is long overdue. Many countries, including those in the G20, have restrictions on foreign ownership. Based on that I would say one possible approach is to treat each country the way a Canadian would be treated if they were to try purchasing property in that country. My own personal preference is to eliminate it altogether. If it is not obvious by now that having such an attractive country in which to live, both today and when the environmental doodoo hits the fan, we attract the worlds wealthy in droves. There is not a snowballs chance that the people of Canada can compete with that. It's an interesting parallel to how we can't compete with 2 dollar an hour wages either.
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Housing as an investment is the biggest issue, housing should simply be a home not a way to make money. Tax house sales for non-resident owners at a high level will go some way to curbing foreign investment.
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Here is the solution. There is should be the additional charge for the foreign home ownership. This charge needs to be flexible, it needs to make a balance between foreign home ownership and Canadians satisfaction. Let's say there is 10% charge for the foreign home buyers. Let's say they buy a home for 1 million dollars. So the 100k is the charge. This ch
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Foreign ownership of Canadian real estate becomes a serious issue every time the Canadian dollar falls to a level that makes it look stupid, as it does right now. Who in their right mind would not buy the most desirable Canadian real estate when it is offered at a 40% to 45% discount to the American dollar. This same phenomenon occurred the last time our dollar was worth 65 cent US and it is happening again. It seems to me that a good way to curb this inflationary force on our housing market is to make the foreign purchaser pay a tax which would be the equivalent of making the US dollar at par with our own. This would level the playing field and enable Canadian buyers to compete with inflated foreign currencies. If a property is valued at $100,00 Canadian and the US buyer only has to pay $60,000 for it what chance do Canadians have to buy it? last year the money was at par: were Americans lining up to buy anything Canadian?, NO! they wouldn't even come to our casinos, The big spenders and high rollers only come here when the dollar is the equivalent of a Mexican peso. Right now the Americans are buying up pick up trucks by converting US dollars to Canadian and pocketing huge savings with the transaction. They are buying up livestock cattle at wholesale prices with no penalty. In a few years if the dollar returns to par, Canadians are left with whatever is left over and if they wish to buy, when the dollar returns to par, Americans will sell for a handsome profit. I'm not an economist but it seems to me if people are worried about inflated prices, a levelling off tax for foreign ownership would resolve ease the problem... Could apply to Europeans also.
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I dont believe there is a problem. This is a perceived problem to make people blame the boogy man while ignoring the real cause of the problem (people over borrowing). Far easier to blame others than ourselves.
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The government should increase supply not in the condo market, but in the low rise segment. Ontario's densification policies are constraining supply, leading prices to go unsustainably higher. There should also be freely available data on all house purchases, just like Zillow in the U.S. It is not a free market if data is not readily available.
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Radical sweeping proposals like "ban all foreign ownership" are politically toxic and sound like Donald Trump material. Also there are too many loopholes--foreign buyers will buy homes indirectly using companies or relatives here on a visa. We need detailed data to design highly targeted solutions. I'm not holding my breath.
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Just consider that a lot of Canadians own property in the US, Mexico, etc and nobody there is complaining.
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A rolling scale cap. If your LOCAL real estate is over priced compared to the average of canada then 10% 20% 30% would be applied until the market levelled off for the region that's inflated. Notice how it's only the big city's of canada. Foreign owners don't bother much outside Vancouver,Kelowna,Edmonton,Calgary,Regina,Toronto.
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This charge is going to the organization which is take care of the money. And this money are going to build an affordable housing for the Canadiens. Of course there will be a lot of people who wish to have this opportunity and in my opinion the priority should be given to young Canadian family between age 25 to 35. Who doesn't have other house or place to live, who will use this place for a living not re
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As a Chinese, I wholeheartedly argue that absolutely no government intervention should be allowed anywhere near the thriving housing market. Yes, it's a bit costly to get a house. But there is a ton of money going in that will trickle down to everyone. Besides, the massice inflation won't last. It's going to tumble sooner or later. Gov intervention could exasperate the fall.
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I, along with my wife's son, my uncle's boyfriend, and my girlfriend's sister, live comfortablly in the periphery of Vancouver. Why bother trying to live in literal millionaireland? Come to Burnaby or New Westminister like n average, sane person.
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As far as regulation goes, there are many ways to do so. The simplest one would be to ban foreign ownership of residential homes altogether , especially at times when Vancouver and Toronto are facing an affordability crisis. If and when the country decides it needs to give its real estate a boost again, it can consider allowing it again.
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Yes and they should also also regulate people buying 2nd homes for flip ups and business while there are people that cant find a house to live in. They are rising up the prices to make is affordable for many locals. The locals are pushed out of their homes. Many are buying homes that they can't afford and that can have band consensuses in the future.
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I *honestly* think that all this talk of foreign ownership is nothing but the real estate industry marketing. Pushing the "buy now or be priced out forever by foreigners" mantra.
I'm sure there ARE cases of foreign buyers, but I dont believe they are the soul cause of over inflated prices in BC and Toronto. Well, any more than because they're being touted as such by realtors. -
What about massively increasing the cost of a demolition permit in the overheated markets?
If a demolition permit was set to equal the sale price of the house, that would massively curb the appeal of buying a heritage house and tearing it down. -
It shouldn't. I hear a lot of talk about they think it is a problem, but no real evidence. let the market take care of itself.
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in the 1970's Prince Edward Island's law preventing non-Canadians from buying island property was struck down by the Supreme Court. This should be revisited, by governments and by courts. Norway is I believe one country that has such a law.
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Investors receive tax-breaks on mortgage interest that regular buyers do not receive (solution: make mortgage interest tax deductible by everybody or nobody). Investors avoid paying down the principle because 65% of a home's value can be rolled into a revolving line of credit (solution: reduce that percentage).
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There should be proof that the buyer has shown intent to live and contribute to this country (i.e,e is a new immigrant). If he or she is new or non-resident, then a 100% surcharge should be applied and the proceeds will go to the govt to build schools, hospitals etc. No non-resident should be allowed to sell the property for a period of 6 years.
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As much as there are foreign buyers, there are local sellers willing to sell to whomever offers the most money and have as much to do with the inflated prices.
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One of the biggest issues with foreign ownership is the lack of residency. Cities have to supply services assuming that there is residency in all the buildings; which cost cities more without the user fees to pay it down. IMHO increasing both the property tax and the resident discount substantially is the way to tackle any issue. It will encourage personal home ownership over renting as well as offset the income loss to local governments that is cause by the high vacant owership issue.
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Last week a 7.8 million dollar house sold for over 9 million. Of the 11 offers 10 were foreign interests using their families VISA's to purchase the property on their behalf. (1) Getting proper information about who is buying and where the money is coming from is definitely a must. (2) A tax on foreign ownership is needed to level the playing field. I say 50% tax on any purchase of a property from foreign interests. This would give average Canadians a chance to compete and generate millions for our government.