Canada closes loopholes to cool housing market
CANADA has announced rules to fight real estate speculation by foreigners blamed for driving up housing prices in two of its largest cities.
The government is amending the tax code to “close tax loopholes and improve tax compliance” with regard to an exemption from a capital gains tax, Finance Minister Bill Morneau told a press conference.
The move means foreign investors – just like Canadians – will have to pay a 50 percent tax on profits from the sale of a home in Canada unless they actually lived in it and declared it to be their primary residence.
Until now, many foreign buyers managed to get around this tax.
The measure is among a series of new mortgage and tax rules unveiled by the Liberal government and its Tory predecessor in recent years in an effort to cool hot housing markets in the cities of Toronto and Vancouver. –