Foreign Buyers Ban - Federal Government Regulations

Until December 21st, the public was unaware of how this budget announcement would impact the housing market. Then days before 2023, the federal government released the supporting regulations on the Prohibition on the Purchase of Residential Property by Non-Canadians Act which includes definitions, exceptions, and enforcement elements to help individuals understand and comply with the law.

Here's what you need to know:

• The Act does not apply to Canadian citizens or permanent residents.

• It only Applies to Non-Canadians directly or indirectly purchasing residential property in Canada within these two years.

• Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.

• It includes all residential purchases made through non-Canadian corporations, trusts or other legal entities.

• Establishes penalties if the act is breached, which applies to Non-Canadians and any person or entity knowingly assisting a Non-Canadian in violating the prohibition.

• The regulations exclude acquisitions of interests resulting from transitional or life events such as death, divorce, separation, or a gift.

• Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from this prohibition.

• Exceptions are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations.

With the new regulations in place, it will be interesting to see if an impact is felt in the housing market as we move towards a busier time of year.