The Canadian government has recently announced four amendments to its foreign buyer ban, known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which was introduced to address growing concerns about housing affordability. The changes have been made less than three months after the legislation took effect, in response to criticism from industry stakeholders who felt that the original legislation was too restrictive.
The amendments to the legislation were announced and they include the following:
- Work Permit Holders: Non-Canadian work permit holders were initially included in the ban, but critics argued that this was contradictory to the government’s immigration goals. As a result, work permit holders are now exempt from the ban as long as they have 183 days or more of validity remaining on their work permit.
- Vacant Land Exemption: The restriction preventing non-Canadians from purchasing vacant land zoned for residential or mixed use has been lifted.
- Exception for Development Purchases: Non-Canadians will now be able to purchase residential property for the purpose of development. This exception was only applicable to publicly traded corporations in the original legislation.
- Increase to the Foreign Control Threshold: The ban initially prevented privately held corporations or entities from purchasing residential property if a non-Canadian owned 3% or more. That threshold has now been increased to 10% following concerns from developers that the 3% threshold was too restrictive and would hinder the development of new housing.
These amendments are a response to the feedback received from industry stakeholders who were critical of certain details in the legislation.
Overall, these changes to the foreign buyer ban are significant and will have an impact on the real estate market in Canada. The exemptions and increased threshold are expected to ease some of the restrictions that were initially placed on non-Canadian buyers, and provide greater clarity and flexibility for homebuyers and mortgage professionals.
If you’re planning on purchasing residential property in Canada, it’s important to stay up to date with the latest regulations and amendments. Make sure you consult with a trusted lawyer, mortgage broker and real estate professional and do your research to ensure a smooth and successful home buying process.