Canadian Lawyer

18 J U N E 2 0 1 7 w w w . C A N A D I A N L a w y e r m a g . c o m verheated housing markets with rampant property speculation and skyrock- eting land values have resulted in restrictions on foreign buyers by two provincial governments as stories of residents and workers being pushed out of their communities abound. And while the initiatives are designed to impose some sort of control in communities where many are having trouble accessing housing, restricting who can buy land is not a new approach. Last July, the British Columbia govern- ment implemented a property transfer tax of 15 per cent on Metro Vancouver home sales by foreign buyers, on top of pre- existing fees. An exemption was later intro- duced for those on work permits, often considered high-demand foreign workers and experienced entrepreneurs. On April 20, the Ontario government introduced a 15-per-cent non-resident speculation tax on residential property in the Greater Golden Horseshoe Area by those who are not citizens or permanent Canadian residents. It is part of its new Fair Housing Plan containing 16 initiatives, including rent control. Ontario initially dismissed imposing any additional controls, but the persis- tently hot Toronto market rekindled the discussion. The property market in Toron- to, along with Vancouver, is considered a major magnet for some of the massive capital flight out of China. There was also concern that one of the impacts of B.C.'s foreign buyers' tax was shifting the interests of foreign investors from Vancouver to other Canadian cit- ies. Sotheby's International Realty Canada released a report in conjunction with Chi- nese property website Juwai.com indicating that inquiries for properties in Vancouver slumped immediately after the B.C. tax was announced. Meanwhile, property inquiries shot up in Calgary, Toronto and Montreal, it reported, adding that the increased inter- est showed no indication of translating into higher sales in those cities. Controls over property ownership is not a novel concept. Other countries, including Australia, Britain, Hong Kong, Singapore and Switzerland, have imposed some sort of restrictions upon speculators or residents of other countries purchas- ing property in those countries. They range from having to ask for permission to additional taxes for foreign property buyers. In New Zealand, property inves- tors now require minimum deposits of 30 per cent and there has been a call to ban offshore buyers. Prince Edward Island, with its tiny, fer- tile land base tucked in among the Mari- time provinces, has long been concerned about off-island ownership. Those con- R E A L E S TAT E MATTHEW BILLINGTON Restricting foreign ownership Rules preventing non-residents from owning property are nothing new, but they are back in the spotlight with a red hot real estate market O By Marg. Bruineman

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