With files from Jon Meyer
Ontario will not implement a foreign buyers tax like the B.C. government did this summer.
Ontario Premier Kathleen Wynne told reporters Monday they will not go down the same road that B.C. did.
The new tax here in Vancouver has driven speculation that foreign investors would flock to Toronto instead, where homes sales jumped over 20 per cent in the Greater Toronto Area last month while falling 33 per cent in Metro Vancouver.
Meanwhile, UBC business professor Tom Davidoff says this decision will have a modest impact on Vancouver’s housing market.
Foreign buyers may find Toronto more attractive, which could be a setback for Vancouver homeowners trying to sell, or a slight advantage for local buyers.
But Davidoff says the tax itself may lose popularity if not picked up by other provinces.
“There is some risk that if Ontario has a different tax policy from Vancouver with respect to foreign buyers that the national and even provincial support politically for the foreign buyers tax might be shorter lived than had Ontario followed suit.”
No timeline on cooling Toronto’s hot housing market says @Kathleen_Wynne. Will not ‘go down the road of BC’ and impose foreign buyers tax.
— Alan Carter (@ACarterglobal) October 24, 2016
Premier Wynne has also said she isn’t interested in doing something in Ontario that was designed for a totally different market.
Davidoff says that while on the surface, Vancouver and Toronto may seem comparable, that might not be the case.
“I think Premier Wynne, said that, between the lines, Toronto is a housing market where people pay for houses with money they make locally as opposed to Vancouver where certainly single family homes tend to be bought by people who already have money that may be brought in here.”
Wynne says she will soon announce a plan to help first-time buyers afford homes.
Davidoff thinks a tax credit for first timers is a mistake.
“Because when you have rapid price growth, it is because supply doesn’t keep up with demand and any subsidy to buy homes expands demand and only pushes up prices.”