A foreign buyers tax for Toronto? Three-in-four in the GTA would support following Vancouver’s lead

A foreign buyers tax for Toronto? Three-in-four in the GTA would support following Vancouver’s lead

By Dave Korzinski and Ian Holliday, Research Associates

October 7, 2016 – If Ontario follows British Columbia’s lead in imposing an extra property transfer tax on foreign buyers of real estate in Greater Toronto, it’s likely to be a popular decision with residents.

When the Angus Reid Institute canvassed Metro Vancouver residents in July, it found overwhelming support for the 15 per cent tax B.C. implemented this summer. In a similar vein, GTA-specific data* analyzed by the Angus Reid Institute suggests that if Ontario were to adopt a similar tax – something local officials have been considering – more than three-in-four GTA residents would support it.

Assuming a GTA tax – like Greater Vancouver’s – is applied at 15 per cent on foreign purchases, 77 per cent say they would support it. Two-in-five (40%) take the position of “strongly” supporting such an undertaking, while a similar number “moderately” support it.

foreign buyers tax

When the Angus Reid Institute asked this same question of Metro Vancouver residents in July, shortly after the B.C. tax was announced, the plan was even more popular. Nine-in-ten (90%) said they supported the move, which many – including Vancouver mayor Gregor Robertson – perceived as long overdue.

foreign buyers tax

Interestingly, while support for a GTA tax is high, foreign investment in the real estate market did not top the list of main causes for high housing prices when residents were asked last year, as seen in the graph that follows. It did, however, take the top spot in Vancouver when ARI asked residents of that region (64% chose it). The extent to which opinions in the GTA have changed over time is unknown.

foreign buyers tax

Another option being discussed by many, including the mayor of Vancouver, is a tax on vacant residential properties. Empty homes were also low on the list of main causes of high housing prices when GTA residents were asked last year, but it’s worth noting that a strong majority of respondents now voice high levels of support for the introduction of a vacancy tax. Seven-in-ten (69%) say they would be on board if the government were to introduce such a tax in the GTA.

foreign buyers tax

Again, support for this proposal is lower in the GTA than it was in Metro Vancouver this summer, though still a strong majority:

foreign buyers tax

How will it affect them personally?

In both Metro Vancouver and Greater Toronto, the Angus Reid Institute has noted a high level of anxiety over home prices. Recent reports that the average home price in the GTA has jumped another 20.4 per cent in the past year will likely add to this concern. When asked just last year, two-in-five (39%) residents said they were already giving serious thought to leaving the region due to housing costs.

foreign buyers tax

Asked how this is type of policy change would affect them personally, very few residents perceive a down-side. The largest segment (46%) says the tax would be neither good nor bad, but another two-in-five say that it would be either excellent news for them (21%) or good news (21%).

foreign buyers tax

Political gains?

The foreign buyers tax implemented in B.C. has had a number of impacts in the months following its imposition. A report from the Canadian Mortgage and Housing Association (CMHC) shows that housing sales dropped in August and September in Vancouver, while they continued to soar in Toronto.

Politically, strong public support for real estate policy changes may have buoyed BC Premier Christy Clark, who this quarter saw her largest jump in approval since 2013. If the rise in Clark’s approval rating is indeed correlated to her government’s introduction of the tax, Ontario Premier Kathleen Wynne may want to take note. Wynne is currently Canada’s least popular premier, with the approval of just one-in-five Ontarians (20%).

 

*A note on methodology:

The Angus Reid Institute analyzed the results of an online survey of 315 adult residents of the Greater Toronto Area who are Angus Reid Forum panelists. The survey was conducted as part of a larger national survey conducted from September 5 – 11, 2016. The data was donated by MARU/VCR&C. A probability sample of this size carries a margin of error of +/- 6%, 19 times out of 20.

 



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