Vancouver real estate agents saw a surge in completed deals as buyers scrambled to beat the August 2 introduction of a new housing tax.
Lawyers reported they were having to turn clients away as the 15 per cent foreign buyer tax came into effect on Tuesday for residential purchases in Metro Vancouver. Business immigrants to Canada are being particularly affected.
The holiday weekend (August 1 was B.C. Day) only served to complicate the issue amid the gathering push to seal deals.
Now Toronto is bracing for further heating of its already red hot housing market, as buyers turn there because of the increased Vancouver prices.
The new tax is intended to tackle a rocketing market that saw the benchmark price for detached home rise over $1.5 million in June.
Some agents reported doing double the number of deals on Friday (July 29) as buyers and sellers looked to jump in before the deadline.
Now there is concern over how the tax will impact those who have agreed deals but did not complete before August 2. Foreign buyers backing out could have a knock-on effect across the market.
Switching Focus
Now Toronto real estate agents are worried foreign buyers will simply switch their focus and start throwing money into the luxury market there.
Quebec draws criticism from both Vancouver and Toronto over its Quebec Immigrant Investor Program (QIIP), which offers permanent residence to high-net worth individuals in return for an $800,000 investment. The program is currently open for applications.
Although candidates have to declare their intent to reside in the French-speaking province, this is unenforceable once permeant residency has been granted.
Constitutional Right
As a result, a high proportion of the rich, mainly Chinese individuals move to Vancouver or Toronto and pump their dollars into the respective housing markets.
Immigration Minister John McCallum says there is very little he can do about this, as freedom of movement for permanent residents is a Canadian constitutional right.
Quebec has control over its immigration policies as part of a 1991 accord with the federal government.
The premiers and leaders of Canada’s other provinces and territories recently called for them all to have the same powers over immigration.
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