Non-residents temporarily prohibited from buying Canadian residential real estate
The Parliament of Canada adopted the Prohibition on the Purchase of Residential Property by Non-Canadians Act to favor domestic investors and curb inflation in the Canadian real estate market. As a result, non-Canadians will be prohibited from purchasing residential real estate in Canada for two years starting in 2023.
This Act will come into effect on January 1st, 2023.
Persons allowed to buy residential property during from January 2023 until December 2024 are
- Canadian citizens or permanent residents, or registered as an Indian under the Indian Act;
- Purchasers of a residential property together with their Canadian spouse or common-law partner;
- Holders of a valid temporary work permit or the refugee status in Canada;
- Students in the process of obtaining permanent residence in Canada*;
- Accredited members of foreign missions in Canada*.
Persons not included in this list are referred to by the term “non-Canadians” and will be affected by the ban.
“Non-Canadians” also include all foreign corporations and trusts, as well as corporations not listed on a Canadian stock exchange and controlled by non-Canadians.
Residential properties include:
- Detached houses or similar buildings comprised of at most 3 dwelling units;
- Semi-detached houses, condominium units and other similar premises;
- Co-owned residential properties;
- Vacant lands zoned for residential or mixed use, and located within a Census Metropolitan Area or a Census Agglomeration*.
However, this excludes:
- Recreational properties*;
- Residential properties located outside of a Census Metropolitan Area or a Census Agglomeration*.
The prohibition will apply only to transactions for which the purchase agreement was signed on or after January 1st, 2023.
The person or entity violating this prohibition, directly or indirectly, is liable to a fine of up to CDN-$ 10,000 if convicted and may be forced to sell the property acquired for no more than its purchase price.
The Parliament is to adopt regulations to clarify certain parameters of the Act (marked with *) before it comes into effect, in particular with regards to the definition of “control” and “purchase”.
Do you have questions regarding real estate transactions in Canada? Feel free to contact our Canadian barrister & solicitors and notaries at Jacob Associates in Germany.
About Jacob Associates:
For 25 years Jacob Associates has been the leading law firm in Germany on Canadian law. The firm's core focus lies in complex cross-border legal issues pertaining Canadian real estate law, corporate/commercial law, litigation as well as estate and probate law to German clients.