Non-Resident Taxes and the Role of House Price Expectations

Mikael Khan and Matthieu Verstraete

No 2019-8, Staff Analytical Notes from Bank of Canada

Abstract: In recent years, the governments of Ontario and British Columbia have imposed taxes on purchases by non-Canadian residents of residential properties in certain jurisdictions. The outsized decline in housing resales observed after these taxes were implemented suggests that the taxes altered residents’ housing market expectations. Using data from the Canadian Survey of Consumer Expectations (CSCE), we show that house price expectations played a material, albeit temporary, role in observed housing market dynamics following the implementation of the non-resident taxes. This effect was more pronounced in Metro Vancouver than in the Greater Golden Horseshoe Area.

Keywords: Financial stability; Housing (search for similar items in EconPapers)
JEL-codes: D84 R21 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2019
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (1)

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