Canada will ban foreigners from buying homes
The measure will be temporary and will not affect everyone.
The crisis in the housing market has forced the government to think about tough measures. Canada's housing minister, Ahmed Hussen, has called on municipalities to redevelop residential areas to increase building density and to ban foreigners from buying property for a while.
Hussen stressed that real estate is primarily for Canadians to live in, not for foreign investors to make money from it.
Canada has long been struggling with a disastrous real estate market. The growing demand associated with COVID-19 has spread far beyond metropolitan areas to smaller municipalities.
The average apartment in Canada now costs $780,400 CAD, up 25% from last year and up 81% from 2015.
Prime Minister Justin Trudeau, re-elected in the last election in September this year, has promised to take measures to provide the population with affordable housing. One of these measures was a ban on the purchase of properties by foreign investors.
Ahmed Hussen did not say when the measure will take effect, but announced that as of January 1, uninhabited properties owned by foreign nationals will be subject to a 1% tax. Additional taxes are also planned for the resale of properties.
In addition, Hussen said a rent-to-own program is being developed that could help renters purchase their first home. The government has also promised a new financial savings program for down payment. The savings will not be tax deductible.
According to statistics, non-residents own 4.3% of properties in Vancouver and 7.7% of properties in Toronto.