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15% tax for foreign buyers in Ontario; Quebec not anticipating the same
News
In late April, Ontario decided to impose a 15% tax on residential properties purchased by individuals who are not Canadian citizens or permanent residents and by foreign corporations. British Columbia implemented a similar tax in Vancouver in August 2016.
The purpose of the tax is to put the brakes on rapidly rising home prices, which have reached record highs in these areas. In Toronto, for example, the average price for a single-family home was $1.21 million in March, a 33.4% increase compared to the previous year (source: Le Devoir). The province of Quebec does not have plans to add a tax for foreign buyers. The finance minister recently confirmed that, for now, there will not be an additional tax for foreign investors on home purchases in Montréal.
Quebec will keep a close eye on the introduction of the tax for foreign buyers in the Toronto area and its potential effect on the Montréal market.
Real estate prices in Montréal remain relatively low and are more affordable than in Toronto or Vancouver.
According to the most recent data released by the Greater Montréal Real Estate Board, the median price for a single-family home rose to $319,000 in May, one third of the $1.1 million recorded last month in Toronto and the reference price of $1.56 million in Vancouver.
And although the number of foreign-purchased homes jumped by 62% in Montréal over the first 9 months of 2016, the Canada Mortgage and Housing Corporation points out that these purchases represent only 1.5% of all the real estate transactions. A recent report by the Québec Federation of Real Estate Boards explains that job growth and an influx of immigrants are fueling the accelerated real estate market in Montréal.
And as it stands now, the Montréal market is not experiencing a surge of Asian investors hoping to avoid the foreign-buyers’ tax in Toronto and Vancouver. At least not yet!