Foreign Buyer Ban is effective January 1, 2023. I'd like to share some implications and details on this policy.
PROHIBITION ON THE PURCHASE OF RESIDENTIAL PROPERTY BY NON-CANADIANS ACT (FOREIGN BUYER BAN - FEDERAL)
This applies to the purchase of residential property across Canada, either directly or indirectly. The goal is to reduce demand and hopefully decrease prices in residential homes in the long run.
But in reality, just a very small percentage (less than 5%) of ownership is foreigner.
Who can purchase?
Anyone who is Canadian citizen, Permanent Resident, or a Canadian controlled corporation.
Length of Ban:
2 years. However, the act does not set out a termination date. It could be extended if it appears to be working.
Properties NOT banned:
Commercial properties, properties containing 3 or more residential units, i.e. multiplex and apartment buildings.
Exceptions on who can buy:
1.Temporary Students (need to meet all of the following criteria)
Must have filed income tax returns for the previous 5 years
Must have been physically present for a minimum of 244 days for EACH of the 5 years
The purchase price of the property is under $500,000 CAD
They have not previously purchased any residential property before
2. Work Permit Holders (need to meet all of the following criteria)
Full time employment for a minimum of 3 years within the 4 years preceding the year of purchase
They have filed income tax returns for a minimum of 3 years with the 4 years preceding the year of purchase
They have not previously purchased any residential property before
3. A spouse of a qualified person purchasing for their personal use
This new act is much more strict on who can not buy residential properties in Canada compared to the Non-Resident Speculation Tax (NRST). There will also be fines for those who assist, counsel or induce a non-Canadian to purchase property. So to all the real estate agents out there, know your client!
