2023 brings with it the start of Canada’s new foreign buyers ban which came into effect on January 1st. Originally passed in June of last year, this ban is intended to help ease the high prices and housing affordability struggles that we have been seeing in the housing market over the last few years and will last for a period of two years. The ban applies to non-Canadian residents and foreign commercial companies and will prohibit the purchase of residential properties with three units or fewer. This may sound extreme but it does come with some exceptions.
Who does this ban apply to?
The Prohibition on the Purchase of Residential Property by Non-Canadians Act applies to individuals who aren’t either; Canadian citizens, permanent residents of Canada or a person who is registered under the Indian Act.
The Act also applies to corporations based in Canada that are: privately held, not listed on a stock exchange in Canada or are controlled by someone who is a non-Canadian
What exceptions are there?
If you are a temporary resident of Canada, perhaps currently in Canada on a work or study permit, there may still be a way that you can purchase a home.
The ban does not apply to temporary residents studying in Canada who are enrolled in an authorised learning institution and have been in Canada for at least 244 days in each of the five years preceding the purchase of the home. You must have filed your taxes in Canada for at least five years and can only purchase a property that is under $500,000.
The rules are slightly different for temporary residents who are working in Canada; you must have a valid work permit and be legally authorized to work in Canada. You must also have worked full-time and filed your income taxes in Canada for at least three of the four years preceding the purchase of the home.
Other exemptions include refugees in Canada or those who are considered protected persons under the Immigration and Refugee Protection Act. Those fleeing international crises and accredited members of foreign missions in Canada are also exempt from the ban.
Any non-Canadians who are found to have breached the ban, as well as those who have knowingly assisted with the breach, could face a fine of up to $10,000.
What does this mean for you?
To find out more about whether the ban will affect your ability to purchase a home, get in touch with our team of expert mortgage brokers today to discuss your options.