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Foreign Buyer Property Ban

In an effort to address rising housing prices and a lack of affordability for Canadians, the Canadian government has implemented a new foreign buyer property ban. The ban, which takes effect January 1, 2023, is intended to limit the impact of foreign buyers on the housing market. The ban is currently in place for two years and applies to residential properties (or residential zoned land) that are located in a census metropolitan area or a census agglomeration.

Under the new policy, foreign buyers are not allowed to purchase or invest in any applicable property, without first obtaining Canadian citizenship or permanent resident status. This means that non-residents of Canada, including foreign citizens and foreign-controlled corporations, are prohibited from buying or investing in residential properties in the region.

As per the Prohibition on the Purchase of Residential Property by Non-Canadians Act, a residential property refers to detached homes or similar buildings, semi-detached houses, rowhouse units, residential condominium units and other similar premises. The ban does not include recreational properties such as cottages and lake houses, as well as larger buildings with multiple units.

The goal of this policy is to ensure that the housing market remains accessible and affordable for Canadians. By limiting the impact of foreign buyers on the market, it aims to slow down the rate of price increases and increase the availability of housing for Canadian residents.

Exceptions to the ban:

• Canadian citizens and permanent residents.
• International students who meet certain requirements, including having spent the bulk of the previous five years in Canada. They would be able to purchase a property for no more than $500,000.
• Workers who have worked and filed tax returns in Canada for at least three out of the four years prior to purchasing a property.
• Diplomats, consular staff and members of international organizations living in Canada.
• Foreign nationals with temporary resident status, including people fleeing conflict, and refugees.

The foreign buyer property ban has faced some criticism. Some argue that it may negatively impact the economy by limiting foreign investment and that it may not effectively address the root causes of the housing crisis, as foreign buyers only represent a small portion of property owners in certain Canadian cities. Additionally, it may also affect the non-resident Canadians who are looking to buy a property in their home country while they are working abroad.

As always, it is important to note that the laws and regulations related to foreign buyers might change in the future, and it is always best to check with the local authorities or a real estate professional for the most up-to-date information.

Please contact us for any questions you may have.