Foreign Buyers Ban - In Effect Jan 1 2023
05 Oct 2022
The goal of the act is to temporarily limit or disincentivize foreign buyers in order to prioritize domestic ones, and to hopefully moderate the rise in home prices.
The act:
- Does not apply to Canadian citizens and permanent residents.
- Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
- Applies to residential property, including detached, semi-detached, condominium units, etc.
- Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
- Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.
The Canadian Real Estate Association (CREA) has been advocating governments to enact measures that will dramatically increase housing supply. While the Foreign Buyers Ban may have a modest impact on supply, CREA believes the federal government should proceed with caution. It has made several recommendations, in part:
- An exemption for US and Mexico to avoid a reciprocal ban from our key trading partners.
- An exemption for the purchase of dwellings slated for redevelopment, providing the redevelopment increases housing stock.
- Should consider existing measures at the provincial and municipal level
The Government has not yet released regulations, which typically clarify and define terms within the Act. CREA’s understanding and interpretation of this legislation may change upon reviewing the upcoming regulations. The legislation may be complicated to interpret, so it’s always a good idea to consult a lawyer for advice or guidance.
