Would the Removal of 15% Non-Resident Buyer Tax on Real Estate Make the Market Better or Worse for Ontarians?
TORONTO, Sept. 13, 2018 (GLOBE NEWSWIRE) — Ali Salarian, Real Estate Broker and Vice President of PPS Realty Brokerage, believes the removal of the 15% Non-Resident Speculation Tax (NRST) which was implemented back in April 21, 2017 in Ontario as a part of 16 points plan to cool Greater Toronto & Golden Horseshoe (GTHA) real estate market is not a good idea.
The last 18 months following the event caused a noticeable slow down in the GTHA real estate market, mainly driven by the NRST in the GTHA market, this made many homeowners fear there might be a further slow down and more negative growth in prices in some segments that were already affected.
The foreign buyers may cause damage to the real estate market just like the stocks market in the long term, as most of them have no ties to Canada and may decide to sell all of their properties for any economic shift in the global market, exactly like what happened during the credit crunch in 2008. Some markets noticed this issue and reacted, take Vancouver-BC for instance, with 15% tax on non-residence in 2016 or a full ban on foreign buyers such as New Zealand. Similarly, the local mortgage lenders have shown their concerns and have tightened the lending criteria on non-residents in Canada due to the aforementioned reasons.
I think the government should encourage Canadian residents to acquire more than one property for investment to help stabilize the rental crises in the GTHA on medium term, and to equally consider easing its qualifications by taking into consideration 100% of rental income into debt serviceability calculation, supported by a strong rental market for the next coming years.
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