Canada to tax foreign homeowners

Canada will start taxing foreign nationals who use Canadian homes to park their wealth, according to the federal government’s fiscal update released on Monday.

“Too often, the price of homes is out of reach for Canadians, in particular for those looking to buy their first home,” the update reads. “Speculative demand from foreign, non-resident investors contributes to unaffordable housing prices for many Canadians. To help make the housing market more secure and affordable for Canadians, the government is committed to ensuring that foreign, non-resident owners, who simply use Canada as a place to passively store their wealth in housing, pay their fair share.”

“The government will take steps over the coming year to implement a national, tax-based measure targeting the unproductive use of domestic housing that is owned by non-resident, non-Canadians, which removes these assets from the domestic housing supply,” the update adds.

Finance Minister Chrystia Freeland unveiled the tax targeting foreign speculators in the mini budget outlining her Liberal government’s economic recovery plan.

The foreigner owner tax was part of Liberal Party’s federal election platform.

“To limit the housing speculation that can drive up home prices, we will also put in place a consistent national tax on vacant residential properties owned by non-Canadians who don’t live in Canada,” Prime Minister Justin Trudeau’s party promised voters. “And we will work with interested provinces,territories and communities to establish a national approach to beneficial ownership so that law enforcement and tax authorities have the tools necessary to crack down on financial crime inthe real estate sector, while respecting Canadian privacy rights.”

The Liberals need support of at least one other party to approve the fiscal update.

The federal New Democrats, who also promised a tax on foreign homebuyers in their platform, are likely to support Freeland’s plan.