The Foreign Buyer Ban Canada

Apr 3

Is There a Foreign Buyer Ban in Canada?

Yes, there is a foreign buyer ban in Canada. This means that non-Canadians can’t buy houses in Canada that are:

In a city or a city’s greater area (Census Metropolitan Areas or Census Agglomeration)
Residential properties (houses with 3 units or less, including attached houses like condos, townhouses, and duplexes)

This means foreign buyers can buy houses in rural areas or properties that have 4 units or more. The ban also doesn’t apply to commercial properties, like office buildings or retail space.

Shortly after the ban took effect, the federal government amended the ban, meaning some foreign buyers and properties are now exempt.

Bill C-19: The Foreign Buyer Ban

The Canadian federal foreign buyer ban is a policy from the Canadian government to reduce the number of non-Canadians buying houses in Canada.

The policy’s goal is to help improve housing affordability in Canada and reduce the impact of foreign investment on the Canadian housing market.

Under the policy, non-residents and foreign corporations can’t buy residential property in most Canadian cities or metro areas.

Foreign Buyer Ban Start Date

The ban has been in effect since January 1, 2023, with more recent updates on March 27, 2023.

The foreign buyer ban was first introduced on June 23, 2022, but didn’t start until January 1, 2023. It will be in effect for 2 years, until 2025.

The Act doesn’t apply to homes that were purchased before January 1, 2023, even if the sale wasn’t finalized until after that date.

Foreign Buyer Ban Amendments

After the Canada-wide foreign buyer ban came into effect on January 1, it became clear that changes were needed.

Originally, the ban applied to all foreign buyers. However, this was a significant barrier to people who had legitimate reasons to buy a house in Canada but weren’t permanent residents, citizens, or a Canadian company.

Now, certain foreign buyers will be able to purchase property in Canada.

As of March 27, 2023, there are the following exemptions and changes to the foreign buyer ban:

Work permit holders
Developers
Vacant land
Increasing the corporation foreign control threshold from 3% to 10%

These amendments to the foreign buyer ban are to make it easier for new Canadians and businesses to invest in property in Canada.

Work Permit Holders

People with a work permit or authorization to work in Canada under the Immigration and Refugee Protection Regulations can now purchase residential property.

In order for work permit holders to be exempt, they must:

Have at least 183 days left on their work permit or authorization
The home must be their first home in Canada

The current requirements for tax filings and previous work experience in Canada have also been removed.

Vacant Land

Section 3(2) is being removed, which is the section about foreign developers.

This means that non-Canadians can now buy land that's zoned for residential and mixed-use. The land can be used for any purpose, including building a house.

Developers

The developer amendments mean non-Canadians can buy residential property with the intention of developing it. This amendment also includes publicly traded corporations and publicly traded entities controlled by a non-Canadian.

Corporation Foreign Control Threshold

Non-Canadian companies are still included in the ban, however, the threshold for what is considered a non-Canadian company has increased.

A company is now considered foreign if a non-Canadian owns 10% or more of it (when previously, companies were considered foreign if a non-Canadian owned 3% or more.)

Foreign Buyer Ban Exemptions

Aside from the amendments, certain properties, people, and companies have always been exempt from the foreign buyer ban.

Exemptions include:

Foreign students
Temporary residents on a work permit
Refugees and refugee claimants
Foreign missionaries
Spouses and common-law partners of Canadians
Rural property or property outside a Census Metropolitan Area or Census Agglomeration
Properties with 4 units or more

Can a Foreigner Buy a Home in Canada?

Foreigners are legally allowed to buy property in Canada in certain cases, but they face more restrictions than Canadians.

It is important for foreign buyers to work with a knowledgeable mortgage broker who can help them navigate the legal and financial requirements of purchasing property in Canada.

Despite the restrictions, it is possible for foreigners to purchase a home in Canada with the right advice. For advice on purchasing a home in Canada, contact the mortgage brokers at Spire Mortgage.

Renee Huse