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Foreign buyer taxes and house prices in Canada: A tale of two cities

Zaichao Du (), Hua Yin and Lin Zhang

Journal of Housing Economics, 2022, vol. 55, issue C

Abstract: In August 2016, the government of British Columbia imposed a tax of 15% on foreign entities buying residential property in Vancouver. A similar tax was imposed in Toronto in April 2017. This paper empirically evaluates the effects of foreign buyer taxes (FBTs) on house prices in Vancouver and Toronto, using a variant of the panel program evaluation method with city-level data and a regression discontinuity design method with house-level transaction data. Our results show that the FBT reduced the house prices in Vancouver by around 5% from 2016:M08 to 2017:M12, and by something within the range of 7% to 9% in Toronto from 2017:M04 to 2017:M12. These effects were concentrated in the single-detached home segment in both cities.

Keywords: House price; Foreign buyer tax; Panel program evaluation; RDD (search for similar items in EconPapers)
JEL-codes: C82 R10 R38 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.jhe.2021.101807

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