The Canadian government recently passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which aims to address concerns about foreign investment in the Canadian housing market. The Act, which takes effect on January 1, 2023 and lasts for two years, prohibits non-Canadians, also known as foreign home buyers, from purchasing residential property in Canada, with some exceptions.
Under the Act, a “non-Canadian” is defined as:
- An individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident
- A corporation that is incorporated other than under the laws of Canada or a province
- A corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada and are controlled by a person referred to in the first two bullet points
- A prescribed person or entity
Residential property is defined as buildings with up to three dwelling units and parts of buildings such as semi-detached houses or condominium units. The Act prohibits non-Canadians, or foreign home buyers, from directly or indirectly purchasing such property. However, there are exceptions for certain groups of non-Canadians, including:
- Temporary residents and protected persons who meet prescribed conditions
- Non-Canadians who purchase residential property with their Canadian citizen or permanent resident spouse or common-law partner
- Prescribed corporations and entities
- Non-Canadians who inherit residential property and are required to sell it within a certain time frame
If you are a non-Canadian, or foreign home buyer, considering purchasing residential property in Canada, it is important to ensure that you meet the requirements of the Prohibition on the Purchase of Residential Property by Non-Canadians Act. Our team of experienced professionals can provide you with detailed advice on how to navigate the Act and ensure that you are in compliance with its requirements. Don’t hesitate to call us for more information.Top of Form
The information provided should not be construed as legal advice. It is intended for general informational purposes only and does not constitute legal advice or a legal opinion. If you require legal advice, you should consult a lawyer or other qualified legal professional.
Ensuring housing market remains available to Canadians. (2022, December 21). Ensuring Housing Market Remains Available to Canadians | CMHC. Retrieved January 2, 2023, from https://www.cmhc-schl.gc.ca/en/media-newsroom/notices/2022/ensuring-housing-owned-canadiansBottom of Form
Prohibition on the Purchase of Residential Property by Non-Canadians Act. (2022, November 28). Prohibition on the Purchase of Residential Property by Non-Canadians Act. Retrieved January 2, 2023, from https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html
