Foreign Buyer Ban
The new federal law, the Prohibition on the Purchase of Residential Property by Non-Canadians Act will prohibit non-Canadians from purchasing residential property in Canada from January 1, 2023. This law has been referred to as the Foreign Buyer Ban.
In April 2022, Prime Minister Justin Trudeau and the Liberal government announced that they will prohibit foreign investors from purchasing homes in Canada for two years, as a way to cool off the hot housing market across Canada.
Clause 235 of Bill C-19 received royal assent on June 23, 2022, enacting new legislation, entitled the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”).
The Foreign Buyer Ban lays a two-year ban on anyone who is not a Canadian citizen or permanent resident from buying residential property in Canada. However there are many exemptions that will apply. This ban will not apply to:
- refugees who satisfy *prescribed conditions*;
- international students on the path to permanent residency;
- individuals with work permits who are already living in Canada; and
- non-Canadian individuals who are purchasing residential property with their spouse or common-law partner who is a Canadian citizen or permanent resident.
Additionally this ban will not apply to non-Canadians who enter into an agreement to purchase a residential property before January 1, 2023.
If a non-Canadian purchases a residential property between January 1, 2023 and January 1, 2025, the infringement of the Act will not affect the validity of the sale of the property. Instead the non-Canadian will be charged criminally and be liable to a fine of up to $10,000. This fine will also apply to anyone that counsels, induces, aids or abets or attempts to counsel, induce, aid or abet a non-Canadian to purchase directly or indirectly a residential property knowing that they are prohibited to do so.
This ban is effective for two years and will be repealed on January 1, 2025.
