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Foreign Buyers’ Tax Just Might Cool Ontario’s Hot Housing Market

  • Rising rates and levies pushed prices down five years ago
  • Ontario is epicenter of real estate affordability crisis
Apartment buildings in the Parkdale neighborhood of Toronto, Ontario, Canada.

Apartment buildings in the Parkdale neighborhood of Toronto, Ontario, Canada.

Photographer: Cole Burston/Bloomberg

If history is any guide, the combination of higher taxes on foreign buyers and rising mortgage rates may cool the red-hot housing market in Ontario.

Canada’s largest province, the epicenter of the country’s pandemic real estate boom, said Tuesday it would raise its tax on foreign purchases of residential real estate to 20% from 15%. The levy is also expanding from Toronto and its surrounding cities to the entire province.