CTV News says the government plans to ban home purchases by foreigners and spend billions on increasing supply
According to CTV National News, on Thursday, the federal government will present a significant crackdown on foreign homebuyers in its federal budget.
The feds are expected to ban residential home purchases by foreign nationals for the next two years. The ban may include condos, apartments and single-family houses.
The measure may not apply to permanent residents, foreign workers and students, as well as to foreign nationals buying a primary residence in Canada instead of a vacation home or investment property.
Such a change would provide more clarity to the Liberal campaign promise to ban foreign nationals from buying residential property in Canada for two years.
It’s still unknown how strong the foreign homebuyers’ influence on the Canadian residential market is.
Nevertheless, a crackdown on foreign homebuyers has been noted both at the federal and provincial levels. The federal government implemented a national 1% tax on the value of non-resident, non-Canadian owned vacant properties. That rule came into effect at the beginning of 2022.
In addition to it, Ontario raised its foreign homebuyers tax from 15% to 20% and expanded its scope to the entire province. Meanwhile, Nova Scotia introduced new taxes on non-resident homebuyers last month.
According to CTV News, the feds are directing $4 billion to help municipalities upgrade their zoning and permitting systems. This change will support faster construction of residential units. Moreover, Ottawa is also reportedly announcing $1.5 billion in loans and funding for cooperative housing and a billion dollars for the construction of affordable properties.
The possible measures also expand on certain promises made by the Liberal Party when it sealed a support deal with the New Democrats, particularly addressing the housing affordability issue and what the government calls a “financialization” of real estate as prices are skyrocketing.
Housing affordability has become one of the main issues during the pandemic, as home prices showed a sharp increase not only in Canada’s biggest centres, but in the suburbs as well. The average non-seasonally adjusted real estate price reached a record of $816,720 in February, marking a 20.6% annual hike, while the average price in Toronto is already near $1.3 million.