Canada Mulls Ban On Foreigners Buying Real Estate – Media

Tom Burroughes

8 April 2022

Canadian lawmakers propose to ban foreign investors from buying homes in the country for two years in a bid to calm hot real estate prices – a sign of how cross-border financial flows around the world are increasingly falling foul of political pressure.

The country’s ruling Liberal Party has targeted real estate in budget proposals, reports said. The 2022 budget set out C$9.5 billion over five years in net new spending on housing initiatives. However, the timeline for legislation on banning foreign buyers wasn’t given .

It also pledged to target domestic housing speculators with new taxes, double new-home construction over the next decade and boost tax credits for first-time buyers. Most measures were outlined in the Liberal's re-election campaign last year, reports said.

Back in 2014, Canada killed its high net worth visa regime, affecting groups such as wealthy Chinese people whose property purchases were blamed for driving high prices.

Among other measures, reports said the Canadian budget proposals also hiked corporate taxes for the country's most profitable banks and insurers to 16.5 per cent from 15 per cent on all taxable income over C$100 million.

Home prices in Canada have increased by more than 50 per cent over the past two years, global property consultants Knight Frank said in an update on the Canadian move. The market saw a record monthly increase in February as buyers acted ahead of rate increases taking the average price of a home to C$869,300 according to Canada’s Real Estate Association , it noted. However, sales were already starting to slow in key markets. In Greater Vancouver, home sales fell 25 per cent in March from a year earlier and average prices fell 13 per cent.

Canada is not alone in taking such steps. Australia has imposed controls on foreign property ownership and, in the UK, foreign property buyers using “shell” corporations to execute transactions are being squeezed. Overseas entities which own real-estate in the UK need to register. And a number of governments, including Canada’s, have slapped sanctions on Russian oligarchs and those linked to Russian president Vladimir Putin following his invasion of Ukraine. In the past, Russians have been significant buyers of properties in the West, along with those from China, the Middle East, and Latin America.