In an effort to control housing supply, newcomers to Canada are now prohibited from purchasing a residential property for a period of 2 years. It is anticipated that the ban will reduce foreign investment into the Canadian real estate market and make homes more affordable in the long run.
The Parliament of Canada passed legislation – the Prohibition on the Purchase of Residential Property by Non-Canadians Act on June 23, 2022. This law came into effect on January 1, 2023.
According to the Prohibition on the Purchase of Residential Property by Non-Canadians Act, a residential property includes detached homes or similar buildings, as well as semi-detached houses, rowhouse units, residential condominium units and other similar premises.
The prohibition applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of 2 years. Canadian citizens and permanent residents, for example, are not subject to the prohibition.
There are certain newcomers to Canada who are exempt from the new rule. This includes:
- Indigenous peoples
- International students on the path to permanent residency
- Individuals with work permits residing in Canada
- Individuals fleeing international crises and other vulnerable populations
- Accredited members of foreign missions in Canada