On January 1, 2023, a temporary two-year measure related to foreign buyers came into eff ect, which bans certain non-Canadians from purchasing residential property in Canada (with some exceptions). The Prohibition on the Purchase Property by Non-Canadians Act (also commonly referred to as the foreign buyer ban) restricts certain foreign buyers from acquiring residential property until January 1, 2025 in large and small urban centres around the country. While this legislation may limit the direct or indirect purchase of residential property in Canada, there are still opportunities for international buyers who aspire to own property in Canada. Here’s what you need to know:
Key Elements Covered in the Regulations
Purchase
The regulations broadly defi ne the term purchase to include the direct or indirect acquisition of a right or interest in Residential Property. However, certain acquisitions resulting from transitional or life events such as death, divorce, separation, or a gift, are excluded.
Individual Exceptions
Many exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. The ban does not apply to renters or to foreigners with a Canadian spouse. For further details, please consult the regulations and/or ensure the buyer who may fall into one of these exception groups seeks legal advice on their eligibility.
Residential Properties Included and Excluded
Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from the ban. To identify if a property is in a CA or CMA, the Canadian Mortgage and Housing Cooperation (CMHC) has developed an online tool.
Types of Properties Permissible for Purchase:
1. Commercial properties
Non-Canadians can purchase commercial properties, including offi ce towers and grocery stores without dwelling units.
2. Vacant land
Acquiring vacant land is not restricted, providing opportunities for investment in undeveloped areas.
3. Recreational properties
Non-Canadians are allowed to purchase recreation properties located outside of a CA or CMA.
4. Multi-unit buildings
Properties containing four or more dwelling units, such as multi-unit buildings, are not subject to the residential property purchase prohibition.
Guidance provided above is not a substitute for obtaining legal advice. audiences should consult legal counsel should they have any questions or concerns regarding this legislation.
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