On January 1, 2023, Canada implemented the Prohibition on the Purchase of Residential Property by Non-Canadians Act, commonly referred to as the Foreign Buyers Ban. This legislation is designed to limit the purchase of residential properties by non-Canadian buyers and was to be in place for two years, until 2025. It has now been extended to 2027.Despite the ban, we expect continued interest from qualified international buyers who remain eligible to purchase homes in Canada.
Who is Affected by the Ban?
The Foreign Buyers Ban targets:- Non-Canadian citizens and non-Canadian commercial entities, which include corporations not incorporated under Canadian law or those controlled by non-Canadians, where foreign ownership represents 3% or more of the entity’s equity or voting rights.
Who is Exempt from the Ban?
Several groups are exempt from the ban, subject to specific conditions, including:- Canadian citizens and permanent residents.
- The spouse or common-law partner of a Canadian citizen, permanent resident, or refugee.
- Non-Canadians seeking to rent a residential property in Canada.
- Temporary residents enrolled in educational programs at designated institutions and who meet certain criteria.
- Temporary residents with valid work permits or work authorization who meet eligibility requirements.
- Refugees and temporary residents fleeing conflict or making refugee protection claims.
- Accredited members of foreign missions in Canada.
What Property Types are Included in the Ban?
The ban applies to most residential properties, including:- Detached homes, semi-detached homes, row houses, and condominiums located within census metropolitan areas (population of at least 100,000) or census agglomerations (core population of at least 10,000).
What Property Transactions are Impacted?
The ban applies to the purchase of residential property, defined as any direct or indirect acquisition of an interest in a property. However, it does not apply to:- Property acquisitions through inheritance, divorce, gifts, or separation.
Penalties for Violating the Foreign Buyers Ban
Violating this legislation carries significant penalties. Anyone who knowingly assists or attempts to assist a non-Canadian in purchasing a prohibited property may face:- A fine of up to $10,000 and a criminal charge under the Criminal Code.