Canada's Justin Trudeau Pledges Two-Year Ban on Foreign Home Buyers

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Canada’s soaring housing market has left some domestic buyers priced out, leading the country’s prime minister to make a radical pledge on the campaign trail: a temporary ban on foreign home buyers.

Justin Trudeau, the Liberal Party head who is running for re-election, proposed the two-year ban as a means to boost housing affordability for Canadians.

“You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change,” Trudeau said at a campaign event in Hamilton, Ontario, according to Bloomberg. “No more foreign wealth being parked in homes that people should be living in.”

Non-resident buyers from China and Hong Kong have been active in the market, particularly in Vancouver, and the average cost of a home in Canada in July was $529,840, up 16 percent year-over-year.

Additionally, Trudeau’s Liberal Party is proposing a ban on blind bidding, calling for tax-free savings accounts for first-time buyers and requesting more oversight of the real estate industry to combat money laundering.

Trudeau certainly isn’t alone in calling out foreign buyers from the bully pulpit. Erin O’Toole, leader of the Conservatives, is also proposing a ban on foreign home buyers for at least two years, as well as the refurbishing of 15 percent of federal buildings for housing.

The New Democratic Party, Canada’s third major political party. doesn’t call for a ban on foreign buyers, but is proposing a 20 percent tax on homes bought by foreigners or non-permanent residents.

According to Reuters, support for Liberals in the polls is slipping, down to just 33 percent in the most recent poll. The election is set for September 20.

Many other major housing markets, including New York, have grappled with the issue of absentee foreign buyers. The New York real estate industry has perennially battled calls for a pied-à-terre tax, warning that it would hobble the city’s housing market and hurt overall tax revenues.

ELB2001 on August 25th, 2021 at 14:56 UTC »

Why only 2 years? So he can promise it again the next election?

dreday67 on August 25th, 2021 at 13:55 UTC »

Ban Investment Firms and their shell companies from buying single family properties, full stop. Let them buy a small % of huge office buildings if they want, but do not price people out of home ownership.

Edit: The article I linked above discusses homes in the US, but the issue is not isolated to one country.

hemingward on August 25th, 2021 at 13:30 UTC »

I don’t see this having much - if any - impact without some kind of personal registry. Couldnt foreign investors simply spin up a numbered corporation in Canada and purchase real estate under that legal entity? I’d be curious as to what the details of this bill would be, and whether or not it has glaring loopholes.

What I do like, which both the Liberals and Conservatives have tabled in their respective campaigns, is total price transparency in real estate, putting an end to blind bidding and arming buyers with actual info and data. If anything has skyrocketed housing prices, it’s that buyers are left in the dark and are forced to emotionally spend as much as possible out of fear they’ll never get in the market if they don’t.