Canada’s latest legislation has shifted its real estate market in a significant way, especially for non-Canadian citizens. The Prohibition on the Purchase of Residential Property by Non-Canadians Act (S.C. 2022, c. 10, s. 235) was passed by Parliament in June 2022, officially took effect in January 2023 and will remain in place for two years before it can be repealed.
Given the complicated nature of the legislation, a good number of people are going to be perplexed by the bill. Hence the team at Langevin Law would like you to know all you need to know about purchasing residential property in Canada as a foreign buyer.
What Properties Are Exempt From Purchase By Foreigners?
The bill prohibits foreign nationals and organizations that are not Canadian corporations from purchasing residential real estate. A residential property, as defined under the bill, includes detached homes and structures of a similar nature. It also comprises semi-detached homes, apartments in residential condominiums, rowhouses, and other dwellings with a similar style.
According to the Canada Mortgage and Housing Corporation (CMHC), the restriction also applies to residential properties that are situated in census metropolitan areas or census agglomerations. It is also prohibited for non-citizens to buy vacant land if it is zoned for residential use.
Fortunately, there are some residential properties that foreigners can purchase. The bill does not cover homes located in municipalities with a core population of fewer than 10,000 people. It also does not apply to vacation homes like cottages and lake houses. Additionally, the purchase of larger structures with several units is not expressly prohibited by law.
Who Is Exempt From The Terms of The Ban?
Even though the law mostly affects foreigners, there are some exceptions. Individuals who are in Canada on temporary work permits, as well as certain international students and refugee claimants, are permitted to purchase homes.
The ban also does not affect people who are permanent residents in Canada, nor does it affect foreigners who want to rent a home in Canada.
Further exempt from the restriction are non-Canadians who have a spouse or common-law partner who is a refugee, permanent resident, anyone registered under the Indian Act, or a Canadian citizen.
What Are The Consequences Of Flouting The Ban?
As this ban is mandated by Canadian law, it must be followed strictly or the legal repercussions will be swift.
If any non-Canadian or organisation that is incorporated outside of Canada purchases residential property as defined by the bill, they will face fines of up to $10,000. Furthermore, the parties violating the law will have to sell the property in question. Any Canadian citizen who knowingly assists any foreign parties in the purchase of residential property covered by the ban will also face fines.
Langevin Law – Real Estate Law Professionals in Cornwall
The introduction of this new legislation does not expressly and totally ban the purchase of residential property by foreign buyers but it does make it more complicated. As such, navigating the Canadian real estate market is now much more difficult for those who have very little experience with it.
Please contact us if you need real estate advice from legal professionals with experience in Canada’s real estate. Langevin Law is dedicated to providing the best legal services possible to Cornwall. Our relentless drive to achieve the best motivates us to keep pushing until our client’s voice is heard.
