A Foreign Homebuyer Tax is Just One Option for Tackling Toronto's Rising Home Prices

Torontoist

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A Foreign Homebuyer Tax is Just One Option for Tackling Toronto’s Rising Home Prices

Councillor Jim Karygiannis thinks a foreign buyer tax could be a solution to Toronto's rising housing prices.

Councillor Jim Karygiannis (Ward 39, Scarborough-Agincourt) has reiterated his support for taxing foreign homebuyers on properties they buy in the GTA. Karygiannis said Thursday he is sending a letter to Ontario Premier Kathleen Wynne asking her to implement a five per cent foreign buyers tax.

In August 2016, British Columbia imposed a tax on foreign nationals buying homes in Metro Vancouver—easily the hottest real estate market in the country, with sky-high housing prices. Since then, the city’s real estate sales have fallen.

Meanwhile, housing in Toronto is only getting more expensive. According to the Toronto Real Estate Board, the average price of a home in the GTA is now more than $730,000—a 20 per cent increase compared to December 2015.

Some real estate groups in the city have come out against implementing a tax here, warning that a “knee-jerk” reaction isn’t the answer. And that might be the case, but if a move like this might prevent Toronto market from reaching the absurd levels Vancouver has seen in recent years—where seven-figure prices on real estate are the norm—it could be worth looking into.

So many Torontonians are already priced out of home ownership, and it’s worth considering all options to make sure the situation doesn’t get worse. But a tax won’t fix everything: there are bigger issues to consider in the landscape of Toronto’s unaffordable housing situation. If imposing a new tax will alleviate some of the pressure, it could decrease housing demand, but it doesn’t solve the supply side of the problem. City Council needs to commit to more than just asking the provincial government to deal with it, and no one policy is going to solve an issue as nuanced as housing affordability.

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