Candice Carr

Mortgage broker / owner / notary public

Kindred Mortgage Co.

Foreign Buyer Ban

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

Who does the ban apply to?

The ban applies to individuals who are not Canadian citizens, not permanent residents, and not persons 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 3% 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.

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, less associated costs.

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, larger buildings with four or more units are exempt. Some of the many additional exemptions include:

  • Properties outside of Census Metropolitan Areas or a Census Agglomeration as defined by Statistics Canada (click here for details)
  • 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.
  • Temporary residents working in Canada who have:
    • a valid work permit or are authorized to work in Canada;
    • have worked full-time for at least three of the four years preceding the purchase;
    • not previously purchased a property in Canada while the ban is in effect;
    • filed income tax returns for three of the four tax years preceding the purchase.
  • 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.

More precise details of the exemptions included in the legislation can be found on the Canada Mortgage and Housing Corporation’s website.

For those who’d like to understand more on who this impacts or want to understand the full depths of the act, we recommend reaching out to a mortgage broker and reviewing the materials published on the Government of Canada’s website.

Get started now for free

Related content

Get Pre-Approved This will always, always be step one before anything else. You can complete my application on this website and we will go through it together to discuss every option available to you. I will review your income, credit, discuss down payment, current mortgage and what your options are.

If you are hoping to maximize your tax return for the 2022 tax year, consider contributing any savings to an RRSP. Your contribution is deducted from your taxable income, potentially helping your tax return grow, or reducing what you will owe in income taxes. Tax returns can easily be used

metis first time home buyer field of grass

One of the most challenging aspects of buying a home is saving for a down payment. If you are Metis, you may be eligible for the Metis Nation – Saskatchewan First time Home Buyers Program. The program helps eligible Metis citizens with a contribution of $15,000 toward the down payment

Sign up for the Mortgage Newsletter

Want to stay up to date on all things mortgage related? Look no further! Sign up for my mortgage newsletter by clicking the link below to be informed about important mortgage news and market information, expert insights and of course money saving tips and advice. I look forward to keeping in touch with you.