As of January 1, 2023, Canada will implement a foreign buyer ban in an effort to address housing affordability and supply issues. This ban will restrict non-Canadian citizens and non-permanent residents from purchasing certain types of residential properties in certain regions of the country.
The ban will apply to the Greater Golden Horseshoe region, which includes the cities of Toronto, Mississauga, and Hamilton, as well as other surrounding areas. It will also apply to the Capital Regional District on Vancouver Island, which includes the city of Victoria.
Under the ban, foreign buyers will be prohibited from purchasing detached houses, semi-detached houses, townhouses, and condominiums in these regions. However, they will still be allowed to purchase other types of properties, such as multi-unit buildings and agricultural land.
The foreign buyer ban is part of the Canadian government's efforts to address the high demand for housing in certain regions of the country, which has led to rising house prices and a shortage of available properties. It is also meant to ensure that Canadians have access to housing that is affordable and within their reach.
While the foreign buyer ban is expected to have a significant impact on the housing market, it is just one of several measures that the government is taking to address the housing affordability and supply issues. Other measures include the introduction of a first-time homebuyer incentive, which provides financial assistance to first-time homebuyers, and the development of a national housing strategy, which aims to increase the supply of affordable housing in Canada.
Overall, the foreign buyer ban is intended to help make housing more accessible and affordable for Canadians, while also ensuring that the housing market remains stable and sustainable.
Additional information:
Starting January 1, 2023, non-Canadians will be prohibited from purchasing residential real estate for a period of two years, although the government announced a number of exemptions. Some of those exemptions include:
- Recreational properties (cottages, cabins and other vacation homes);
- Buildings with more than three units;
- International students based on certain conditions, including having spent most of the previous five years in Canada;
- Foreign nationals with temporary resident status;
- Workers who have filed tax returns in Canada for at least three of the last four years prior to buying their property;
- Refugees, refugee claimants and those fleeing international crises;
- Diplomats and consular staff living in Canada
A member update sent by Mortgage Professionals Canada indicated that the legislation “does not rely on mortgage professionals to enforce the ban, however both the non-Canadian purchaser of prohibited property and any person or entity that knowingly assists in the purchase can be fined up to $10,000 and the property can be forced to be sold.”