Earlier this year, the Canadian government announced that a new foreign buyer ban would come into effect on January 1st, 2023. This policy will be in place for two years, with the possibility of a renewal at the end of that period.
The federal ban will apply to foreign individuals, foreign trusts, foreign corporations, and Canadian corporations that are controlled by a foreign entity.
You will be exempted from these measures if:
- You are a Canadian citizen or permanent resident of Canada with a valid residency card
or an accepted refugee. Some other residents on a student or work visa may also be exempted.
- You are buying property in co-ownership with your Canadian citizen or permanent resident spouse. Details on the requirements to come.
- You are purchasing a multiplex consisting of three dwellings or more, i.e. a triplex.
- You are purchasing a commercial-use property, i.e. an office space or a retail store.
- You signed a purchase contract with the vendor prior to January 1st, 2023.
- The property is situated in a recreational area, such as Mont Tremblant or Whistler, that can only be used for vacation purposes.
Now let’s talk about the penalties.
It’s unclear who’s going to be responsible for confirming the identity of the person in terms of residency or citizenship status. It seems like it will be the notary, but we’re still waiting to learn more.
If the government does find out that you’ve purchased a property under this ban and you weren’t supposed to, they’re saying there will be fines of up to $10,000.
Now, let’s talk about why this was implemented. As you’ve certainly seen in the news, the Canadian housing market has been on fire, and the government is trying to cool it down a little bit.
In certain segments of the market, foreign buyers play a very significant role in the market heat-up. So by removing them from the buyer mix, they’re trying to cool down the market and make sure that Canadian homes remain affordable for Canadians.
Have more questions about what comes next for local housing? Reach out! We have the answers.