Canadian Foreign Buyer Ban: What You Need to Know

"Effective as of January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying property in Canada.  On February 4, 2024, the Government of Canada announced its intention to extend the existing ban on foreign ownership of Canadian housing for an additional two years, to January 1, 2027."  CMHC Blog

What is the Act about?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts non-Canadian individuals and entities from buying residential properties in Canada.  Initially this was to be for a time frame of 2 years but it has now been extended for another 2 years.  The Act aims to cool down Canada markets that are being heavily affected by foreign purchasers as part of a strategy to address housing affordability and availability. 

Key Features

  • Residential properties are being defined but the Act as buildings with 3 dwelling units or less. This includes condominiums and freehold properties.
  • Anyone convicted of violating or assisting someone in violating the Act may be subject to a $10,000 fine and a court can order the sale of the residential property.

Exemptions

If specific criteria is met here are some of the circumstances that may be exempt:

  • Temporary Residents with a student visa
  • Temporary Residents with a work visa
  • Refugees
  • Accredited members of foreign missions
  • Spouces or Common-Law Partners

Property Types that are Exempt:

Make sure to reference reliable resources such as CMHC and watch for updates. 

In conclusion, the Prohibition on the Purchase of Residential Property by Non-Canadians Act has significant impacts on the real estate industry in Canada. It underscores the importance of working with a knowledgeable and capable real estate agent who is well-versed in the nuances of this legislation. Choosing an agent who understands the act's implications ensures that buyers navigate the market effectively and comply with the legal requirements, thereby safeguarding their investment and facilitating a smoother property acquisition process.

Ready to navigate the Canadian real estate market with confidence? Connect with our expert agents today.

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