CANADA BANS REAL ESTATE INVESTMENT FOR NON-CANADIANS FOR 4 YEARS!
- Marion Pudeleau
- Feb 16
- 2 min read
Canada's federal governement delivers on its promise!
The Prohibition on the Purchase of Residential Property by Non-Canadians Act* came into effect on January 1, 2023, banning foreign investors from purchasing residential properties for a period of four years. With this measure, the government aims to curb the rise in housing prices in major Canadian cities, which has been steadily increasing for years. However, this record appreciation in property values was also one of the key benefits of investing in Canadian real estate, as highlighted in the 7 Reasons to Invest in Real Estate in Canada!
What does this new law entail? Here are the key details!
1- THE LAW
The law itself is quite simple and is summarized in a short statement: An Act to prohibit the purchase of residential property by non-Canadians.
The term non-Canadian refers to any person who is not a Canadian citizen, permanent resident, or Indigenous person, as well as privately held corporations controlled by foreign individuals.
The term residential property includes single-family homes, semi-detached or row houses, condominiums, and vacant land zoned for residential use.
2- EXCEPTIONS
There are some exceptions to this law*.
Below are some of the most important ones:
Temporary residents are exempt if they meet several conditions, such as:
Holding a valid study permit, and:
Filing all tax returns for the five years prior to purchase
Being physically present in Canada for at least 244 days per year in those five years
The purchase price not exceeding CAD 500,000
Not owning any other residential properties
or
Holding a work permit, and:
At the date of purchase, their permit or authorization to work in Canada is still valid for at least 183 days
Not owning any other residential properties
Other exceptions include:
Refugees
Non-Canadians purchasing a home with their Canadian spouse or common-law partner
Properties acquired through inheritance, donation, divorce, or separation
3- PENALTIES
Any non-Canadian who violates this law, as well as any person or entity that assists, advises, or encourages a non-Canadian to purchase a residential property directly or indirectly, is subject to a maximum fine of CAD 10,000.
You got it—with this new legislation in effect, it has become very difficult to invest in real estate to house your child studying in Canada, in anticipation of Canadian immigration, or even less so for the purpose of diversifying your assets!
Let’s hope that the enforcement of this law will last only until 2027, as currently planned…
Not sure if your situation allows you to invest in real estate in Canada? Do you have questions about this law? I can help!
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