With files from The Jon McComb Show
According to a developer in Toronto, Vancouver’s new foreign buyers tax is forcing house hunters to invest elsewhere.
The tax, which came into effect almost a month ago, forces foreign buyers to pay an additional property transfer tax of 15 per cent.
Jordan Teperman, executive vice-president of Haven Developments in Toronto, says Toronto is seeing the effects of the tax.
“How we are seeing it is in telephone calls and the interest. We won’t know until the next month or two of what the implication is – meaning that people will have to identify certain projects in the Toronto market.”
He says they are getting interest from brokers that would traditionally sell out projects out west.
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“We really don’t know what the effect of it is yet, but I could tell you form the seven projects that we have on the go…we are getting a lot of calls from brokers out west saying they have customers that would traditionally invest in Vancouver and are coming to Toronto now because they feel it’s a safe heaven, and two, they are so taxed out in their foreign countries.”
Teperman says another major developer that works closely with them said the figures could be as high as 60 or 70 per cent of the volume of investors could go to Toronto instead of Vancouver.
He also explains the influx of investors they are receiving are coming from all around the world, not only China.
“We are seeing [investors] from Europe, Asia, we are seeing from the United Emirates…even South America.”
He thinks Canada overall has been a good place for people to bring their money because of its safety. He says Vancouver and Toronto also have some of the best talent in the development construction business. But he says Toronto is also seeing families priced-out of neighbourhoods.
“The residential, new-starter home in the 80s would cost you $300,000 maybe $200,000, and today that home is trading for a million dollars. So for the developers it then becomes an issue of how much density can you get on a site.”
Teperman says the provincial government is now monitoring the real estate market to see whether or not the province will follow suit with B.C.’s foreign tax.