Canada’s Foreign Buyer Ban Begins in January 2023
With the implementation of the Prohibition on the Purchase of Residential Property by Non-Canadians Act, foreign nationals will no longer be permitted to purchase homes in all of Canada as of January 2023. For two years, this Act forbids non-citizens and non-permanent residents from purchasing homes in Canada.
In general, the Ban prohibits foreign corporations and people from buying residential real estate in Canada between January 1, 2023, and December 31, 2024 if they are neither Canadian citizens nor permanent residents of Canada. Any contracts formed or commitments made before January 1, 2023, are exempt from the Ban.
The Act also forbids non-Canadians from buying residential property through corporations or other entities in order to get around the restriction. The purchase of prohibited property by a non-Canadian may result in a fine of up to $10,000 and the forced sale of the asset, as well as penalties for any accomplices to the purchase.
Residential property includes parts of buildings like semi-detached houses, strata units, or other similar premises, as well as detached houses or similar buildings of one to three dwelling units.
Who Will the Ban Affect?
People who fall under the Act’s definition of “non-Canadian” as of January 1, 2023, will be subject to the Ban, including:
- Individuals who are neither a Canadian citizen nor a permanent resident of Canada;
- corporations incorporated outside of Canada; corporations “controlled” by foreign corporations or
- individuals who are not Canadian citizens or permanent residents (with “control” to be defined in the Anticipated Regulations);
- and such other individuals and entities to be listed in the Anticipated Regulations.
Property Types Affected
A portion of any building that is a rowhouse, semi-detached house, residential condominium, or other similar premises intended to be owned separately from other units in the building, as well as such other residential properties to be listed in the Anticipated Regulations, will fall under the definition of “residential property” under the Act, and will therefore be subject to the Ban.
There might be exceptions for specific demographic groups, different residential property types, and unique situations, but these have not yet been established. Although it is uncertain, we believe the following exemptions will be implemented:
- recreational properties,
- residential property located outside of a large urban centre,
- vacant land where the land has been zoned for residential use or mixed use by municipal authorities within large urban centres,
- Indigenous peoples,
- international students on the path to permanent residency,
- individuals with work permits residing in Canada,
- individuals fleeing international crises and other vulnerable populations, and
- accredited members of foreign missions in Canada.
Exemption
- recreational properties,
- residential property located outside of a large urban centre,
- vacant land where the land has been zoned for residential use or mixed use by municipal authorities within large urban centres,
- Indigenous peoples,
- international students on the path to permanent residency,
- individuals with work permits residing in Canada,
- individuals fleeing international crises and other vulnerable populations, and
- accredited members of foreign missions in Canada.
We currently don’t know a lot about the Act because specifics haven’t been made public by way of regulation. Furthermore, the definitions of “control” and “purchase” under the Act remain ambiguous. It is planned to publish the final regulations later this fall.
Photo Credit by : sebastiaan stam
References:
Matt Mayers. 2022, ‘Canada’s Foreign Buyer Ban Begins in January’, BCREA, 4 November. Accessed 9 November, 2022 <https://www.bcrea.bc.ca/advocacy/canadas-foreign-buyer-ban-begins-in-january/>Saravan Veylan, Dax Moir. 2-22 ‘It’s Not Just Foreign Buyers Who’ll Be Impacted by Canada’s Residential Real Estate Ban’ mltaikins.com, 8 November, Accessed November 9, 2022 <https://www.mltaikins.com/general/its-not-just-foreign-buyers-wholl-be-impacted-by-canadas-residential-real-estate-ban/>
