Ottawa bans purchase of Canadian residences by foreigners for two years
The federal government provides a $10,000 fine for non-Canadians who buy residential property.
The purchase of Canadian residential properties is now prohibited for foreign investors for a period of two years. In this way, the federal government wishes to stabilize a real estate market weakened by the pandemic.
Under the Prohibition on the Purchase of Residential Real Property by Non-Canadians Act, which came into force on January 1, 2023, persons who are not Canadian citizens or permanent residents cannot will no longer be able to acquire non-recreational residential properties on Canadian territory.
The federal government imposes a $10,000 fine for non-Canadians who purchase residential property in contravention of this prohibition as well as only for anyone who assists in carrying out a prohibited transaction.
In a press release released on December 21, Ottawa indicated that this two-year moratorium would ensure that the homes belong to the Canadian population and not to foreign investors.
“Housing shouldn't be just property. They are designed to be inhabited. They are places where families can put down roots, make memories and build lives together. »
— Ahmed Hussen, Minister of Housing, Diversity and Inclusion
We will continue to do everything we can to ensure that all residents of the country have affordable housing that meets their needs, Ahmed Hussen, Minister of Housing, Diversity and Inclusion, said in the same statement.
Sanctioned on June 23, this law had aroused the discontent of certain actors in the real estate community who claimed that the Canadian government had given little information to promoters, builders and lawyers about the consequences of this moratorium.
For developers completing projects in major Canadian cities, the conditions surrounding a purchase agreement signed before January 1, 2023 remain unclear. Many claim to have heard nothing from Ottawa about it.
If experts had recognized the affordability intent behind the bill, some had argued that its application would affect very few transactions.
Critics had also claimed that the rising price of Canadian homes was more influenced by the scarcity of supply than by foreign demand.
According to the Canada Mortgage and Housing Corporation (CMHC), Canada needs to build at least 3.5 million new homes by 2030 to hope for a return to affordability.