According to various reports online, Montreal is the new housing hotspot for Chinese buyers as Toronto and Vancouver levies foreign buyer tax.
The foreign buyer tax in Toronto and Vancouver has meant that many Chinese buyers prefer to buy in Montreal. According to a report from Juwai.com, a Chinese website for buyers of overseas property, Chinese buyers inquired about US$1.45 billion worth of Canadian properties in 2017.
Interest in Montreal grew by 84.5 per cent in 2017 and 43.3 per cent a year earlier, the report said. This increase is directly linked to the foreign buyer tax in Vancouver and Toronto, experts said.
According to reliable sources, no new foreign buyer tax is expected to be imposed in Canada this year.
“After retreating from an exuberant peak in 2016 of US$101.1 billion, Chinese international real estate investment again appears to be on a growth path, although more steady and restrained that what we saw in that golden year,” Juwai’s Foreign Buyer Restrictions Report 2018-19 said.
The report also suggested that other factors could have led to increasing prices in property price increases, including lower interest rates and population growth.
[pullquote align=”normal” cite=”- Juwai report”]“Although Montreal Mayor Valérie Plante reportedly hopes to be given powers by the Quebec government to tax foreign buyers and owners, neither she nor other leaders have yet called for such taxes to be imposed,”[/pullquote]
More than half of Chinese buyers considering Canada wanted to invest for their use, nearly 26 per cent for investment and 17 per cent for education purposes, According to the Juwai report.
Canada is a preferred destination for many Asian students to pursue higher education and many Chinese parents buy houses for their children to stay in. Richer Chinese prefer to live out of multiple homes and look for properties that they can use as holiday homes apart from being a good financial investment.
However, the foreign buyer tax has led some Chinese buyers to take a step back to reassess their options.
According to the report, the other place where foreign buyer tax is expected to come into existence in New Zealand.
“In other areas, like New Zealand, legislation is being considered but has not yet passed by Parliament. With that said, New Zealand is the sole country or region among those evaluated where we think new foreign buyer restrictions are likely to be introduced in the coming year,” the report said.
Juwai also reassured Chinese buyers that no such tax is expected in Montreal.
“Although Montreal Mayor Valérie Plante reportedly hopes to be given powers by the Quebec government to tax foreign buyers and owners, neither she nor other leaders have yet called for such taxes to be imposed,” The report said.