Canada PM Promises Ban on Foreign Home Buying as Election Draws Near

Canada’s Prime Minister Justin Trudeau revealed on Tuesday that a re-appointed Liberal government would restrict foreigners from purchasing Canadian homes for in the next two years and make house purchases more straightforward in a bid to address quick value gains.

Trying to remain on the PM seat in a Sept. 20 election, Trudeau vowed to build more homes and help tenants become homeowners with a rent-to-own program, an installment savings program and bigger tax credits.

While campaigning in Hamilton, Ontario, Trudeau declared at the campaign ground that owning a home should be within reach if one worked hard and saved well enough. 

Canada Records Increase in Home Costs

Home costs in Canada have leaped by 15.6% since the past year, and the Canadian Real Estate Association’s home cost index is up 69.7% since November 2015, when Trudeau first became prime minister.

The Liberals promised to prohibit new ownership of homes by foreigners for two years and extend the parameters of an extant law to include vacant homes owned by foreigners. They also guaranteed the introduction of an anti-flipping tax that would kick against the sale of residential properties within 12 months of purchase.

Tredeau threatened to crack down on predatory speculators making things difficult for home buyers via what is known as blind bidding. 

“We’ll get serious about predatory speculators that stack the deck against you. So no more blind bidding,” noted Trudeau.

Blind bidding is a practice in Canada where purchasers present an offer not knowing what the other parties are offering. As noted by opponents, this could be abused to inflate the prices of homes.

Home Markets Recover from Pandemic-Driven Buying Surge

Plenty of the real estate markets in Canada are recovering from the peak of house buying craze that was instigated by the pandemic. Still, many prospective buyers currently need a lot more to even afford deposits for houses. 

According to the Liberals, their novel rent-to-own mandate will aid Canadians save for initial payments by converting part of their rent to savings. On its part, the down payment savings program will pave the way for tax waivers on savings.

Meanwhile, Trudeau’s primary opposition and leader of the Conservatives, Erin O’Toole pledged to build more than a million homes for over three years and also declared that he would stop non-residents, who are as well non-Canadians from buying properties in Canada for a minimum of two years.