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Brace for a possible tax on speculative home purchases

6/14/2017 | Posted in Mortgages and Real Estate by Michael Antczak | Back to Main Blog Page

Mortgage Rates - Interest Rates

The chief economist of the Canadian Real Estate Association says homeowners in the Greater Toronto Area should brace themselves for a possible tax on speculative home purchases.

Gregory Klump says he would not be surprised to see policy-makers roll out such a measure just as the market begins to recover from the most recent round of changes.

The Ontario government introduced a suite of policies in April aimed at cooling runaway house prices in the Greater Golden Horseshoe region, including a 15 per cent tax on foreign buyers and expanded rent controls.

Home sales in the Greater Toronto Area fell by 20.3 per cent in May, the month after the new rules took effect, suggesting that the measures are having the desired impact.

However, some economists say the impact may be short-lived like it was in Vancouver, where the introduction of a foreign buyer tax caused a temporary pause in activity before it picked up again.

Klump says he could see it taking about six months for the housing market in the Toronto area to gather steam again, provided that no new measures are introduced between now and then.

Source: Canadian Press

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