A new law to make homes more affordable for Canadians is now in effect. The foreign home buyers ban in Canada became official on January 1st, 2023, prohibiting non-Canadians from purchasing a residential property in the country for two years.
The ban is called the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
A “non-Canadian” refers to anyone who is not a Canadian citizen, permanent resident, or person registered under the Indian Act, according to the Government of Canada.
This ban also applies to companies in Canada that are controlled by someone who is non-Canadian, privately-held, or not listed on a stock exchange in Canada.
These individuals and companies are prohibited from buying residential properties in “a census metropolitan area or a census agglomeration,” as well as vacant land that is zoned for residential use or mixed-use in these areas, for a period of two years.
However, there are some exemptions to the ban.
According to the Canadian Mortgage and Housing Corporation (CMHC), the following people are exempt from the ban:
- Temporary residents studying in Canada
- Temporary residents working in Canada
- Refugee claimants and individuals fleeing international crises
- Accredited members of foreign missions in Canada
To be exempt, these individuals must also meet a set of requirements.
For example, international students are only allowed to buy a home for $500,000 or less.
Plus, the exemption only applies to students who have been physically living in Canada for five years before the purchase was made, for 244 or more days during each year.
It’s also worth noting that an exception has been made for “recreational properties,” which means that foreigners are still allowed to buy a vacation home in Canada.
Whether or not the foreign home buyers ban will actually make housing more affordable for Canadians remains to be seen, but it’s a step in the right direction.