[URBAN NOTE] On Jim Karygiannis’ call for a foreign buyers tax in Toronto
CBC News’ John Reiti reported on Toronto city councilor Jim Karygiannis’ call for a tax to be levied on foreign buyers of Toronto real estate.
A Toronto councillor is renewing calls to implement a foreign buyers tax to cool down the city’s red-hot real estate market.
Coun. Jim Karygiannis, who held a Thursday news conference alongside a McMaster University economist, has sent a letter to Ontario Premier Kathleen Wynne asking for permission to slap a five-per-cent tax on foreign buyers.
Ontario has balked at the idea of taxing foreign buyers over concerns that such a tax could significantly hurt the value of homes that people already own. The province is also keeping an eye on Vancouver’s market, where a 15 per cent foreign buyers tax came into effect on Aug. 2, 2016.
“We’re not taxing our own folks,” Karygiannis told reporters at city hall.
Torontoist has pointed out that even if this tax achieves its limited goal of cooling down the market, it cannot be the only response.
Some real estate groups in the city have come out against implementing a tax here, warning that a “knee-jerk” reaction isn’t the answer. And that might be the case, but if a move like this might prevent Toronto market from reaching the absurd levels Vancouver has seen in recent years—where seven-figure prices on real estate are the norm—it could be worth looking into.
So many Torontonians are already priced out of home ownership, and it’s worth considering all options to make sure the situation doesn’t get worse. But a tax won’t fix everything: there are bigger issues to consider in the landscape of Toronto’s unaffordable housing situation. If imposing a new tax will alleviate some of the pressure, it could decrease housing demand, but it doesn’t solve the supply side of the problem. City Council needs to commit to more than just asking the provincial government to deal with it, and no one policy is going to solve an issue as nuanced as housing affordability.