Effective January 1, 2023, a new ban will come into effect that will prevent certain non-residents from purchasing residential property in Canada.
This law is an attempt by the feds to regulate high prices in Canada's real estate market.
The ban will last for two years. However, there are some exceptions to this.
Who is prohibited from buying a home in Canada?
According to the Canada Mortgage and Housing Corporation, this ban applies to all "non-Canadians".
This law considers you a "non-Canadian" if you are not a Canadian citizen, permanent resident or a person registered under the Indian Act.
Not only that, but this prohibition also applies to corporations that are privately owned, not headquartered in Canada or managed by a foreign national.
However, there are some exceptions to this rule. Temporary residents attending school in Canada are exempt if they attend a "designated learning institution".
In addition, they should have filed taxes for five years prior to making the purchase, lived in Canada for 244 days for each of the previous five years, have not purchased a property before and are purchasing a property that costs less than $500,000.
In addition, if you are a temporary resident who is working in Canada, you can purchase a home if you have a valid work permit, have worked in Canada for three of the four years prior to purchasing the property, have filed your taxes and have not purchased a property before.
Refugees and refugee claimants are also exempt if they have been granted refugee protection, have filed an eligible claim for refugee protection or have temporary resident status.
What type of property does this affect?
This is a prohibition on the purchase of "residential property" which is defined as "buildings of up to three dwelling units and portions of buildings, such as townhouses or condominium apartments."
If someone violates the law and, as a non-Canadian, purchases residential property, they could be subject to a $10,000 fine. This applies to anyone who knowingly also assists a non-Canadian in their purchase. In addition, a court may even order that the property purchased be sold.