Mario Toneguzzi | Jul 25, 2023. Source Real Estate Magazine.
The Canadian luxury real estate market has been experiencing a wave of challenges, particularly for high-profile professional athletes, executives, and global talent seeking to purchase homes in the country.
Despite recent amendments to the country’s recently enacted foreign homebuyer ban, allowing some work permit holders to purchase real estate, the impact of the ban, alongside provincial taxes, like Ontario’s 25 per cent non-resident speculation tax, persists.
Engel & Völkers’ 2023 Mid-Year Canadian Luxury Real Estate Market Report, highlights the potential friction these restrictions create for organizations attracting top-tier talent to Canada.
Unintended consequences of the foreign ban
The foreign buyer ban has caused uncertainty in the luxury real estate market. Jesse Dean Cook, an advisor based in West Vancouver with Engel & Völkers, points out that the ban might be affecting individuals such as tech CEOs, celebrities, and professionals from various industries, potentially limiting their ability to purchase properties in Canada.
He says the impact of this ban on the luxury market remains challenging to quantify, but anecdotal evidence suggests that it may be hindering some high-net-worth potential buyers.
“There’s a lot of people from LA moving to Vancouver, especially for all the tax credits and whatnot they’re getting for film and TV industries, so perhaps they are not able to purchase,” Cook says.
Cook said he’s come across a couple of clients who have been impacted by the new federal legislation. He shared he has a client from Los Angeles, connected with Netflix, who wants to buy a large estate that’s more than $10 million, and they’re in the process of getting their permanent residency.
“So they’ll be delayed about a year,” the realtor shared, adding that about five per cent of the client base is affected by this rule.
Cook also had a client from Milan, Italy, who wanted to purchase in Vancouver but had no way of doing so.
“(It) was an incoming lead from our office from one of my listings and wanted to purchase a place here in Vancouver and just had no idea that there was this foreign ban coming in. He couldn’t purchase it. I’ll be in touch with him if this ban ever lifts.”
For clients like that, is the industry shifting gears to accommodate some of these high-profile, high-net-worth potential buyers?
“It’s challenging. There’s not really much I can do. It’s not a tax.”
