File photo shows a model of the Central building, a luxury real estate complex where units were pre-sold. Photo: AFP / Laurent Vu

In an attempt to curb foreign speculation, Prime Minister Justin Trudeau vowed to tax non-residents who buy Canadian properties but don’t live in them, as he campaigned Thursday for reelection.

At a stop in British Columbia, which has seen double-digit annual rises in housing prices over the past decade, the Liberal leader said most young people “can’t even imagine buying a home right now,” which he blamed partly on overseas purchases.

“Owning a house should be a realistic life goal,” he told reporters. “It’s where you set down roots, where you raise a family, where you grow old.

“But young people hoping to buy their first home, just like their parents did a generation ago, are facing a tough housing market.”

In addition to expanding first-time buyer incentives, Trudeau said if elected to a second term he would introduce a one-percent annual tax on all residential properties owned by non-resident, non-Canadians.

The tax would be applied on top of similar measures already introduced in the provinces of Ontario and British Columbia to cool red-hot real estate markets in Toronto and Vancouver, where average home prices top Can$1 million (US$750,000).

Trudeau and others blamed these soaring prices “in part on housing speculation by foreign owners.” Record-low interest rates and a housing supply shortage have also contributed to the increases.

“We’re sending a message that Canada is not a place for those who wish to speculate in the housing market,” Trudeau said.

“We’re doing this because we want our markets to stay stable and affordable.”

Trudeau faces a tough general election on October 21, dogged by an ethics scandal that has taken the shine off his golden boy image and left him vulnerable to a sharp challenge from Conservative Andrew Scheer.

AFP

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