In an attempt to curb foreign speculation, Prime Minister Justin Trudeau vowed to tax non-residents who buy Canadian properties but don’t live in them, as he campaigned Thursday for reelection.
At a stop in British Columbia, which has seen double-digit annual rises in housing prices over the past decade, the Liberal leader said most young people “can’t even imagine buying a home right now,” which he blamed partly on overseas purchases.
“Owning a house should be a realistic life goal,” he told reporters. “It’s where you set down roots, where you raise a family, where you grow old.
“But young people hoping to buy their first home, just like their parents did a generation ago, are facing a tough housing market.”
In addition to expanding first-time buyer incentives, Trudeau said if elected to a second term he would introduce a one-percent annual tax on all residential properties owned by non-resident, non-Canadians.
The tax would be applied on top of similar measures already introduced in the provinces of Ontario and British Columbia to cool red-hot real estate markets in Toronto and Vancouver, where average home prices top Can$1 million (US$750,000).
Trudeau and others blamed these soaring prices “in part on housing speculation by foreign owners.” Record-low interest rates and a housing supply shortage have also contributed to the increases.
“We’re sending a message that Canada is not a place for those who wish to speculate in the housing market,” Trudeau said.
“We’re doing this because we want our markets to stay stable and affordable.”
Trudeau faces a tough general election on October 21, dogged by an ethics scandal that has taken the shine off his golden boy image and left him vulnerable to a sharp challenge from Conservative Andrew Scheer.