The Canadian government has set out plans to introduce tax for any foreign non-resident that owns or buys a house in the country.
In its autumn 2020 budget, the federal government said the measure stems from the fact that “too often, the price of homes is out of reach for Canadians, in particular for those looking to buy their first home”.
“Speculative demand from foreign, non-resident investors contributes to unaffordable housing prices for many Canadians.
“To help make the housing market more secure and affordable for Canadians, the government is committed to ensuring that foreign, non-resident owners, who simply use Canada as a place to passively store their wealth in housing, pay their fair share.”
This is because the “unproductive use of domestic housing” owned by foreign non-residents is removing property from the domestic supply, the federal government added.
It is still not clear how the tax will be calculated, what value ranges, if any, will be applied, as the details for the “national, tax-based measure” will be unveiled next year.
International law firm Dentons believes more will be explained in the government’s next budget, “expected sometime in 2021”.