Canada has decided to extend its foreign home buyer ban, officially known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, until January 1, 2027. Initially set to end in 2025, this move aims to make more homes available for Canadians to buy by limiting the ability of non-Canadians to purchase residential properties.
What the Ban Means
Non-Canadians, which include individuals who aren’t Canadian citizens or permanent residents, can’t buy homes that have up to three dwelling units. This includes most houses and condos. However, buying property is still possible in less populated areas outside of the main cities.
Exceptions to the Rule
There are a few situations where non-Canadians can still end up owning property in the bigger cities:
- Acquiring property through divorce, separation, inheritance, or as a gift.
- Renting a property to live in doesn’t count as buying.
- Banks or financial institutions taking over a property due to unpaid debts.
- Non-Canadians looking to develop property can still make purchases.
Recent Amendments for Work Permit Holders
Changes made in April 2023 have slightly loosened restrictions for those with a valid work permit. Now, if you have a work permit and it’s not expiring soon, you can buy land for mixed-use or commercial purposes but only one residential property. The new rules have also scrapped some previous requirements, like work experience and tax documents, allowing for the purchase of vacant land for development.
To stay within the law, non-Canadians may need to show:
- A valid work or study permit.
- Proof of their residence status.
- Documents that confirm their residency duration in Canada, like rental agreements or utility bills.
Consequences of Breaking the Law
Buying a home against these rules is a criminal offense, carrying fines up to $10,000 CAD. If caught, the court can force the sale of the property, with the non-Canadian not making any profit from it. Companies breaking the rule can also see their representatives held responsible.
Why This Matters
This extended ban is part of Canada’s larger effort to make housing more affordable for its residents, alongside programs like the Housing Accelerator Fund and the Apartment Construction Loan Program.
Home Prices in Canada
Despite these measures, home prices are still on the rise. According to the Canadian Real Estate Agency (CREA), the average home price in December 2023 was $657,145 CAD, up 5.1% from the previous year. Listings have also increased, offering more options for potential buyers.
Canada’s approach to managing its housing market is multifaceted, aiming to balance the needs of its citizens and permanent residents with the dynamics of a global real estate market. This extension reflects the government’s commitment to ensuring that Canadians have access to affordable housing options.
