In June 2022, the Federal government of Canada enacted into law a new act, banning non-Canadians from buying residential property in Canada for two years effective January 1, 2023.
Who is impacted?
The act puts a ban on the purchase of residential properties, so commercial investment properties are still fine for non-Canadians which is good news. It’s designed to protect Canadian citizens, permanent residents or persons registered under the Indian Act. Anyone else can’t buy residential property for 2 years following January 1, 2023, so until 2025!
This also includes corporations that are privately held, not based in Canada or are run by a non-Canadian.
There are exemptions, the most applicable being:
- Those with Permanent Resident status (PR)
- The spouse of a permanent resident if purchasing with your spouse
- Some students (see below)
- Temporary residents under the Immigration and Refugee Protection Act
Temporary residents who are going to school in Canada are exempt if they are attending a "designated learning institution."
Moreover, they should have filed their taxes for five years before the purchase was made, lived in Canada for 244 days for each of the previous five years, have not bought a property earlier and are buying a property that costs less than $500,000.
Also, if you're a temporary resident who's working in Canada, you can buy a home if you have a valid work permit, have worked in Canada for three of the four years before buying the property, filed your taxes, or have not previously purchased property.
What type of property does this affect?
This is a ban on the purchase of "residential property" which is defined as "buildings of up to three dwelling units and parts of buildings, like semi-detached houses or condominium units."
Included in the ban are pieces of property with no dwelling that have been zoned for residential or mixed-use.
There is a big exception to this, however. Any residential property outside of a census metropolitan area or census agglomeration doesn't count in this ban.
What is the fine for breaking this law?
If you go against this act and, as a non-Canadian, buy a residential property, you could be subjected to a $10,000 fine. This goes for anyone who knowingly helps a non-Canadian in their purchase too. To make things worse for violators, a court may even order that the purchased property be sold.
Source: Narcity Canada
How will this impact Edmonton homeowners?
Most believe the intent was to protect Canadians who are competing against foreign buyer investors who are speculatively buying residential properties and driving the values up “artificially”. This was mostly in Greater Toronto area, greater Vancouver and Montreal’s markets. The recent rises in interest rates, and other government taxation policies over the last few years have already negatively impacted property values in those markets and based on a recent CBC article we’re already seeing many Ontarians leaving to Alberta for housing affordability and better income and lifestyle.
In the CBC article, “Lane, the director of the foundation's Human Capital Centre, says the job market is the first driver of population changes.
"A very close second recently has been the cost of living in Vancouver and Toronto, the cost of housing for young people. It has absolutely been out of reach to be able to buy a home."
British Columbia and Ontario were the two largest sources of migrants within Canada, with about 11,000 and 12,000 people arriving, respectively, from each.”
Whatever your political views are, be sure to contact your member of parliament or vote accordingly in the next federal election. In the meantime, this policy will impact many existing property owners in Canada with not having as many potential buyers and they are hoping for it to help current Canadians be able to get into home ownership.
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