During the last federal election campaign, there were commitments made related to limiting opportunities to purchase property in Canada for foreign buyers or taxing them with a higher percentage.
On June 23, 2022, Parliament passed the Prohibition on the purchase of residential property by non-Canadians Act. Coming into force January 1, 2023, this Act:
- Does not apply to Canadian citizens and permanent residents.
- Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
- Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of 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.
- Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.
At present CREA is working with government, provincial associations and other stakeholders to keep down the impacts of the new rules on the businesses of REALTOR® members, and any associated impact on an already slowing housing market.
Important note that before Dec 31st non-Canadian citizens still can complete their purchases. The language used in the Act suggests the prohibition applies to APS entered into after the January 1, 2023, coming into force date.
The Government has not yet released regulations, which typically clarify and define terms within the Act. CREA’s understanding and interpretation of this legislation may change upon reviewing the upcoming regulations. The legislation may be complicated to interpret, so it’s always a good idea to consult a lawyer for advice or guidance.