What Will Happen When The Foreign Buyer Ban Removed?

Mar 7, 2022 | 0 comments

This year the federal government has implemented new policies on the housing market:

1. Two-year temporary ban on overseas buyers;

2. Prohibit blind bidding;

3. A 1% vacancy tax is charged on properties owned by overseas buyers.

As long as these three policies are implemented this year, they will likely change the market’s direction.

As a result, just this week, the policy of “temporarily banning overseas buyers for two years” died before it was successful. Not only that, but the policy of “charging 1% vacancy tax on properties of overseas buyers” may also be more relaxed. What exactly is going on? Due to the lack of mainstream media reports, I have tried to restore what happened by referring to different information channels. I also hope that you will pay attention to my account and get insightful policy interpretations at any time!

The matter starts with Bill C-8, which proposes a 1% vacancy tax on properties owned by overseas buyers. This week, a lawmaker proposed adding a “two-year temporary ban on overseas buyers” to Bill C-8 through Amendment so that two goals can be accomplished at once.

Surprisingly, although this bill was proposed by Liberal during last year’s general election, it has recently opposed its own party members. The main reason is that some lawmakers in the United States expressed concerns about this bill during last year’s election.

They threatened that if Canada levied the foreign buyer vacancy tax, they would push the United States to charge Canadians the same. Canada has many people, commonly known as “snowbirds”, who own retirement homes in the southern United States. These Canadians live in Canada every summer and move to their homes in the southern United States during the winter. Many Canadian MPs or their relatives and friends have properties in the United States, so they began to oppose the Bill C-8 bill out of their own consideration.

The result is that when we voted this week to add the clause of “the temporary ban on overseas buyers for two years”, the proposal was rejected by a vote of 6 to 5! This also means that Trudeau cannot fulfill his promises in last year’s election.

Note that the addition of the “two-year temporary ban on overseas buyers” was only voted down this week, while Bill C-8 itself has not been voted on. But even the bill itself is likely to die out at present unless there are significant changes, such as not charging Americans with a vacancy tax. Still, this exception will cause dissatisfaction in other countries.

According to the current situation, these “three axes” are likely to be implemented only this year with “banning blind bidding”. The original combination boxing was cut off before two fingers were shot. It is expected that reducing the housing price will be significantly reduced. Of course, Trudeau has not officially announced that he is no longer seeking to introduce these two policies, so there may be changes in the future.

 

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Written by Ghazal Jessani

Ghazal has extensive experience in pre-construction developments, serving as a guest blogger to CondoOutlet.ca. Before entering the real estate industry, she worked as a manager in a global accounting firm. Ghazal holds an MBA degree from the Rotman School of Business at the University of Toronto.

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