Source: Money Control —
With the aim of making more homes available and affordable for its own citizens, the Canadian government has decided to ban immigrants from buying property in the country for two years. This, real estate experts say, is expected to lead to reduced demand among non-Canadian resident Indians.
The order states that the ban comes into effect from January 1, 2023 and as an exception, refugees and permanent residents have been permitted to purchase land. Also, the ban would apply only to city dwellings and not to recreational properties.
Canadian Prime Minister Justin Trudeau had proposed the measure during his 2021 election campaign to combat rising real estate prices. “The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” the Liberal Party had said then.
The Canadian Real Estate Association (CREA) said in a statement, “Canada has built a reputation as a multicultural nation that welcomes people from around the world. As currently proposed, the prohibition on the purchase of residential property by non-Canadians can impact our reputation as a welcoming nation.”
“The potential benefits of the ban are likely to be modest,” it added.
According to Akash Puri, director, International Business, India at Sotheby’s International Realty, the latest decision will definitely reduce demand among non-Canadian resident Indians.
It is to be also noted here that the stamp duty in any case was one of the highest for foreign buyers in Canada, ranging from 15-25 percent depending on the provinces. The government also imposes a 1 per cent annual “underused housing tax” on the value of the residential property owned by foreign non-resident buyers.
Puri also explains that besides the years when there was a financial crash and COVID-19, the real estate market has always given good returns in the Canadian markets. (Refer to graph)
