As the Canadian government continues to strive for improved housing affordability, a new legislation known as the “Prohibition on the Purchase of Residential Property by Non-Canadians Act” has been implemented, fundamentally changing the landscape of home ownership in the country. This has led to the launch of the Foreign Homebuyers Guidance Tool, a resource designed to help non-Canadians navigate this new regulatory environment.
Effective from January 1, 2023, this Act prevents non-Canadians, including corporations not listed on a stock exchange in Canada and controlled by non-Canadians, from buying residential property in Canada for a period of two years. The legislation applies to residential properties defined as buildings with up to three dwelling units, including semi-detached houses and condominium units. However, it is worth noting that larger buildings with four or more dwelling units are not covered by this prohibition12.
The Act, however, does not apply to all. Exceptions have been made for certain individuals and circumstances. For instance, Canadians, permanent residents, persons registered under the Indian Act, and temporary residents who meet specific criteria are exempted from the prohibition34. Moreover, the Act also includes provisions for situations such as when a non-Canadian acquires a residential property through divorce, separation, gift, or death, or for the purpose of development5.
Understanding these regulations can be challenging for those wishing to buy property in Canada. This is where the Foreign Homebuyers Guidance Tool comes in, providing an accessible and user-friendly way to understand the Act and its implications.
With the implementation of this legislation, the Canadian government is aiming to make homes more affordable for people living in the country. The new rules seek to control the rapid increase in property prices which have been partially attributed to foreign investment.
Despite these restrictions, certain areas and types of properties remain open to foreign buyers. Non-Canadians can still purchase residential properties located outside of Census Metropolitan Areas (CMA) and Census Agglomerations (CA), and larger buildings with four or more dwelling units6.
To conclude, while the new Act introduces significant changes to the process of purchasing residential property in Canada for non-Canadians, the Foreign Homebuyers Guidance Tool serves as a beacon, illuminating the path to understanding and navigating these changes.
Please note that while I strived to provide accurate and up-to-date information, the article does not delve into the details of all exceptions to the Act. More research would be necessary to provide a comprehensive understanding of the Act, including all exceptions and amendments that came into force on March 27, 20237. This blog post should be seen as an introduction to the topic, and I highly recommend using the Foreign Homebuyers Guidance Tool for more detailed guidance.