How should Canada regulate foreign ownership in the housing market?
Canada doesn't have a good official estimate of how much foreign money is invested in housing
The Canada Mortgage and Housing Corporation says it has been in contact with tax authorities and police agencies that track money laundering in order to beef up its data collection regarding foreign buyers.
It's an issue that has become divisive in recent months and years as Canadian house prices — especially in the two hot markets of Toronto and Vancouver — set sales records with each passing month.
- CMHC looks for new ways to track foreign money in Canadian real estate
- Expect trouble if and when foreign buyers abandon Canadian housing: Don Pittis
- Vancouver foreign ownership research prompts cries of racism in hot housing market
- Mike de Jong says foreign ownership tracking will ensure 'our rules' are followed
In November, CMHC head Evan Siddall said he suspects foreign money is driving up prices, especially in the luxury home market.
"In Vancouver and Toronto, it is very possible that foreign buyers account for a substantial portion of the demand for pricier, luxury single-family homes," Siddall said last fall, adding that the agency was looking at beefing up its data on the subject.
CBC business columnist Don Pittis argued late last year that it's a "scandal" Canada doesn't have a good official estimate of how much foreign money is invested in Canadian housing, when other countries assemble that info as a matter of course.
B.C. Finance Minister Mike de Jong told CBC News last month that the province will be able to formulate recommendations after it has collected foreign ownership data.
"There are all kinds of approaches and ideas," he said. "Our objective here is not to suddenly say to the rest of the world that people aren't welcome here and that we aren't encouraging people to come here to invest, to create jobs, to create businesses. But we also want to make sure that there's equity. We want to ensure that people are following our rules and paying the taxes that they are obliged to pay."
What do you think?
How should Canada regulate foreign ownership in its housing market?
Readers let us know in the latest CBC Forum — a live, hosted discussion about topics of national interest.
(Please note that user names are not necessarily the names of commenters. Some comments have been altered to correct spelling and to conform to CBC style. Click on the user name to see the full comment in the blog format.)
Some commenters said there was no need to do anything.
"Why would we dissuade investment in this country? There are tens of thousands of jobs being created in the construction industry. We don't need some interventionist political agenda messing up free enterprise based on folklore surrounding foreign ownership." — Dean (The one who got here...
"This is a perceived problem to make people blame the bogeyman while ignoring the real cause of the problem (people over-borrowing). Far easier to blame others than ourselves." — mrclam
A majority of commenters wanted restrictions.
"Any solution implemented will need to be retroactive to make any difference whatsoever. To correct housing prices you need to have three things happen: 1. Raise interest rates 2. Outlaw shadow flipping and discourage any speculation, with massive taxes on it 3. Severely tax foreign owners at least 50 per cent of the assessed value unless they can prove residency at least six months a year." — Jeff Quigley
"Levy a tax on 'underoccupied' residences. Collect data from utilities providers which should strongly indicate whether a property or unit is actually occupied. If you are not an active participant in our economy (either by living in the home you own or renting it to a tenant), then you should bear the 'opportunity cost' to our economy. By which I mean the following: Had another person acquired the property as a residence, they would be an income- , payroll- and sales tax-paying member of the community. You as a non-resident, non-participant give nothing back to Canada." — CougarCommenter
"What about massively increasing the cost of a demolition permit in the overheated markets? If a demolition permit was set to equal the sale price of the house, that would massively curb the appeal of buying a heritage house and tearing it down." — partridge
Several commenters said, regardless of where you stand, more data is needed.
"First we need some concrete information before making a judgement or coming up with rules." — W May
"The first thing is to collect comprehensive data about current ownership. We need a government law that mandate every owner to report their citizenship status as well as their job and their primary residence. I am amazed that CRA is not collecting these data even for tax purposes. After that we can have an informed discussion." — Jane
With files from CBC's Pete Evans and Don Pittis