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Federal Foreign Ban Announcement 2023
The federal government’s ban on new foreign ownership of residential property becomes law on January 1, 2023, disallowing anyone who isn’t a Canadian citizen or permanent resident from buying residential real estate for two years.
During this period, the federal government plans to work with provinces and municipalities to develop a framework to better regulate the role of foreign buyers in the housing market to ensure housing is available for and used by Canadians.
The Liberal Party promised the ownership ban in the 2021 election and rolled it out in the federal Budget 2022: a plan to grow our economy and make life more affordable. The budget was clear on the government’s goals:
“We will do everything we can to make the market fairer for Canadians. We will prevent foreign buyers from parking their money in Canada by buying up homes. We will make sure that houses are being used as homes, rather than as commodities to be traded,” – Budget 2022.
To this end, the government tabled Bill C-19, Budget Implementation Act, 2022, No. 1. It received Royal Assent on June 23, 2022. Section 235 of the bill is the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
Who can’t buy residential property?
The act defines a non-Canadian as:
- an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
- a corporation that is incorporated otherwise than under the laws of Canada or a province;
- a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b); and
- a prescribed person or entity.
- A temporary resident within the meaning of the Immigration and Refugee Protection Act; or
- A non-Canadian who buys residential property with a Canadian spouse or common-law partner if the spouse or common-law partner is a Canadian citizen or permanent resident, or person registered as an Indian under the Indian Act.
Includes any real property or immovable that is:
- a detached house or similar building, containing not more than three dwelling units;
- a semi-detached house, rowhouse unit, residential condominium unit or other similar premises, vacant land, where the land has been zoned for residential use or mixed use and is within a Census Metropolitan Area (having a population of at least 100,000) or Census Agglomeration (having a population of at least 10,000); or
- any prescribed real property or immovable.
Property Purchased by a Non-Canadian Before January 1, 2023
- Foreign Buyer Ban announced January 2023
- BC property assesments up 5-15%
- Soaring immigration will put more pressure on housing supply
- House prices may fall but rents are expected to rise
- Expect two more rate increases by Spring 2023