The Ontario government pulled in $200-million in one year from the foreign-buyers tax on real estate as the market continued to see a decline in international purchases, according to previously unreleased figures.
The data, obtained by The Globe and Mail through Freedom of Information requests, are the first evidence in more than a year that foreign investment is still slipping in the Toronto region.
International buyers, who pay a 15-per-cent tax on residential real estate purchases in the sprawling area known as the Greater Golden Horseshoe, bought 1,607 homes in the region between February, 2018, and January, 2019, according to the provincial government.
The foreign-buyers tax was introduced two years ago by former premier Kathleen Wynne’s government as part of a package of measures designed to cool the Toronto area’s overheated housing market. Almost immediately, home sales began to tumble. The tax came several months after the B.C. government implemented its own levy, which also preceded a slowdown.
British Columbia, which introduced a foreign-buyers tax in August, 2016, said such international purchases in the Vancouver area fell from about 13 per cent in the seven weeks before its adoption to less than 5 per cent by February, 2018.
Soon after he became leader of Ontario’s Progressive Conservatives more than a year ago, Doug Ford said he was considering scrapping the foreign-buyers tax. However, his government has not taken steps to abolish the levy since taking office last June.
Asked about plans for the tax on Monday, a spokesman for Finance Minister Vic Fedeli said the government is focusing on making home ownership more affordable for Ontario families but did not directly address the levy.
The Ford government has not released any data relating to the foreign-buyers tax, which is known officially as the non-resident speculation tax. The previous Liberal government provided quarterly updates.
The figures provided to The Globe did not include the overall number of residential real estate transactions, making it impossible to calculate the percentage of purchases by international buyers.
The government’s data show that 1,607 transactions in the Greater Golden Horseshoe region, which spans from Niagara to Peterborough, involved foreign buyers between Feb. 17, 2018, and Jan. 31, 2019. As a point of comparison, 738 homes were purchased by non-residents in the region in just three months between mid-November, 2017, and mid-February, 2018, which was the last period for which data were released by the former government. At the time, foreign buyers represented 1.6 per cent of home buyers in the region and 2.5 per cent in the city of Toronto.
The new statistics show that international buyers are drawn to the city of Toronto, which had more than half the number of foreign transactions in the region in the 12-month period ending in January. In all, 872 of 1,607 transactions were in Toronto. The next most popular area was York Region, with 276 purchases.
John Pasalis, a Toronto realtor who analyzes industry data, said the figures suggest that the tax is continuing to deter foreign speculators. He argued that even a slight decrease in demand means that more homes were available for purchase by local residents.
“It still looks like it’s having its desired effect of maybe getting rid of a lot of the speculation,” he said. “It looks like it’s cut out a lot of the froth in the market.”
The data obtained by The Globe also reveal for the first time how many foreign home buyers have received rebates.
In the period between the previous Liberal government’s introduction of the tax in April, 2017, until Jan. 31, 2019, a total of 281 applicants received rebates and refunds, or 79 per cent of those who applied. The total amount given back was $28.7-million.
Provincial rules allow foreign home buyers to receive rebates if, after buying property, they become permanent residents of Canada within four years, are full-time students for at least two years or work full-time in Ontario for one year. The government issues refunds if the tax has been improperly paid.