Foreign Buyer Ban – What You Need to Know￼
Foreign Buyer Ban Took Effect January 1, 2023
The Foreign Buyer Ban, or more formally the Prohibition on the Purchase of Residential Property by Non-Canadians Act, takes effect January 1, 2023 and prevents non-Canadians from buying residential property in Canada for 2 years, the Canada Mortgage and Housing Corporation has announced.
The Government of Canada has passed this new law to help make homes more affordable for people living in Canada.
Exemptions from the ban include:
- 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.
In developing the accompanying regulations, the Government reached out to Canadians for their feedback. A detailed consultation document containing specific policy proposals intended for the regulations was available for comment for 4 weeks in August and September 2022. The consultation process received approximately 200 written submissions from individuals and stakeholders.
Key highlights of the New Regulations:
- The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023.
- The Act defines residential property as buildings with 3 homes or less, as well as parts of buildings like a semi-detached house or a condominium unit. The law does not prohibit the purchase of larger buildings with multiple units.
- The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house.
To learn how Justo can help you in your homebuying journey, contact our team today.