March 27, 2023 | Only 3 months after a new law came into effect prohibiting non-Canadian buyers from purchasing residential property in Canada for 2 years, the federal government is revising its decision.
In a press release, the Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion, outlined 4 changes to this law. The goal of these changes is simple: to increase housing accessibility.
Background Information
The Act introduced in the 2022 Federal Budget was passed by Parliament on June 23, 2022. It then came into effect on January 1, 2023 as part of the Government of Canada’s strategy to increase housing affordability in Canada.
It provides for a two-year ban on non-Canadian buyers from purchasing a home zoned for residential use anywhere in Canada.
Changes announced and effective as of now
Allow more work permit holders to purchase residential property while working in Canada
Initially work permit holders could purchase a residential property as long as it met one of these 3 exceptions:
- The property is outside of a census metropolitan area (CMA);
- It was a building with 4 or more units;
- It was a vacant lot zoned residential.
Now, work permit holders can access any type of residential property as long as they meet the following criteria:
- Their work permit remains valid for 183 days or more from the date of purchase;
- This is the first residential property they have purchased.
The prohibition Act no longer applies to vacant land
It is now possible for a non-Canadian buyer to purchase land zoned residential or mixed use anywhere in Canada. In addition, the land can be used for any purpose including residential development. This overrides subsection 3(2) of the original by-law.
Allowing the purchase of vacant land by non-Canadian buyers for real estate development purposes
The law that had been the focus of much debate has been lifted. Non-Canadian purchasers can now purchase vacant land for real estate development purposes. This change also applies to publicly traded companies and corporations. This rule applies across the country and reassures city councils in metropolitan areas that were concerned about the long-term economy..
Increasing the foreign control threshold of companies involved in the purchase to 10%
More companies and private entities that are incorporated abroad or controlled by a non-Canadian can now purchase residential properties. Initially, this was reserved for companies with a foreign control threshold of 3% or less. This threshold has now been increased to 10%, opening up a pool of buyers.
Additional Informations
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Access more information on the law prohibiting the purchase of residential real estate by non-Canadians.
