What you need to know about Canada’s new foreign buyer ban – Updated

The start of the new year saw Canada’s new foreign buyer ban officially come into effect.

The two year-ban, originally passed by Parliament in June to help address housing affordability challenges, will apply to non-Canadian individuals and commercial enterprises.

However, the Prohibition on the Purchase of Residential Property by Non-Canadians Act includes a long list of exceptions.

Below, we’ve outlined some of the key details of the ban, including the pertinent exemptions.

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Who does the ban apply to?

The ban applies to individuals who are not a Canadian citizen, not a permanent resident, and not a person registered under the Indian Act.

It also applies to corporations based in Canada that are privately held, not listed on a stock exchange in Canada or are controlled (representing at least 10% equity share or voting rights) by someone who is non-Canadian.

When is the ban in effect?

The foreign buyer ban took effect on January 1, 2023, and will remain in place for a period of two years.

However, the ban does not apply to non-Canadians who purchase offers prior to January 1, 2023, even if the sale is finalized after that date.

Why was the ban introduced?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act was introduced by the federal government as part of a strategy to tackle the housing affordability struggles faced by many Canadians. The government said it is meant to ensure housing remains accessible to Canadians.

"Homes should not be commodities,” Housing Minister Ahmed Hussen said in a release. "Homes are meant to be lived in, a place where families can lay down roots, create memories and build a life together.”

What are the consequences for those found in violation of the ban?

Any non-Canadians found in breach of the prohibition—as well as those that knowingly assist with the breach—could face a fine of up to $10,000.

Additionally, their property can be sold by court order and could see the non-Canadian receive no more of the proceeds other than the price they originally paid for of the property.

What are some of the exemptions?

The new legislation includes a number of exceptions in which non-Canadians will be able to continue to purchase property in Canada.

For example, it does not apply to recreational properties, such as cabins or cottages, nor larger buildings with four or more units. It also doesn’t apply in communities with a core population of less than 10,000.

Some of the many additional exemptions include:

• Properties outside of Census Metropolitan Areas or a Census Agglomeration as defined by stats Canada (click here for details)
• Vacant land that is zoned for residential of mixed use.
• Any residential property that is purchased for the purpose of development.
• Temporary residents studying in Canada who have:
  • enrolled in an authorized study at a designated learning institution;
  • filed income tax returns for each of the five taxation years preceding the purchase;
  • been in Canada for a minimum of 244 days in each of the five calendar years preceding the purchase;
  • not previously purchased a property in Canada while the ban is in effect;
  • purchased a property for under $500,000.
• Work permit holders who have:
• at least 183 days of validity remaining on their work permit Refugees who have been given refugee protection or are considered protected persons under the Immigration and Refugee Protection Act of 2001.
• Refugee claimants and those fleeing international crises.
• Accredited members of foreign missions in Canada.