The regulations for the ban on foreign homebuyers in Canada came into force on January 1, 2023.
The ban means that foreign commercial enterprises and people will be prohibited from purchasing residential properties in Canada for two years.It was passed by Parliament last June and is geared at lowering the ballooning housing affordability challenges facing Canadians.
The exceptions for the act include a temporary resident within the meaning of the Immigration and Refugee Protection Act who satisfies prescribed conditions and international students who meet certain standards.
Those found in violation of the act can receive a fine of up to $10,000 and may be ordered to sell the property.
The act defines residential property as buildings with three homes or fewer, 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. “Through this legislation, we’re taking action to ensure that housing is owned by Canadians, for the benefit of everyone who lives in this country,” said Housing Minister Ahmed Hussein in a news release (below) on December 21, 2022.
“Homes should not be commodities. Homes are meant to be lived in, a place where families can lay down roots, create memories and build a life together.”
Back in 2021, Prime Minister Justin Trudeau tasked his cabinet with creating a temporary foreign homebuyers ban. The full list of terms on the ban can be found on the Government of Canada website.
Here is a recent News Release by Canadian Mortgage and Housing Corporation:
Ensuring housing market remains available to Canadians
The Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion, today announced new regulations that will be used to implement the Prohibition on the Purchase of Residential Property by Non-Canadians Act, ensuring housing is owned by Canadians.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act will ban foreign investors from buying non-recreational residential property in Canada.
The Act was passed by Parliament on June 23, 2022 and will come into effect on January 1, 2023, for a period of two years.
As part of its strategy to tackle the housing affordability struggles of Canadians, the Government of Canada announced these measures in Budget 2022, to ensure that housing is owned by Canadians, and not by foreign investors.
The Act prohibits foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada.
It establishes a $10,000 fine for non-Canadians who buy residential property in contravention of the prohibition. Exceptions are set out for some circumstances. Individuals with temporary work permits, refugee claimants, and international students may be exempt if they meet certain criteria.
The Government of Canada consulted with government partners, stakeholders, and Canadians to develop accompanying regulations to set out specific exceptions, definitions, and clarifications necessary to implement the prohibition. The regulations, published in the Canada Gazette today, will come into effect January 1, 2023. The regulations will be automatically repealed after two years.
The prohibition is just one way that the government is working to make housing more accessible to Canadians. Through our National Housing Strategy, we’re investing in initiatives to increase the supply of rental housing, build more homes, and bring down the barriers that keep them from being built.
Quote:
“Homes should not be commodities. Homes are meant to be lived in, a place where families can lay down roots, create memories and build a life together. Through this legislation, we’re taking action to ensure that housing is owned by Canadians, for the benefit of everyone who lives in this country. We will continue to do whatever we can to ensure that all residents of this country have a home that is affordable and that meets their needs.”— The Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion