The federal government announced amendments to the foreign homebuyer ban on Monday that eases some restrictions for non-Canadians, including newcomers to the country.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed by Parliament in June 2022 and came into force on the first day of 2023.
Under that law, non-citizens, non-permanent residents, and foreign commercial enterprises were blocked from purchasing Canadian homes — with some exceptions for international students and temporary residents. Those who violate the ban face a $10,000 fine and may have to sell the offending property.
The amendments will now allow some non-Canadians to purchase residential property in certain circumstances in order to help add to Canada’s housing supply, according to a statement from the ministry of housing.
Effective immediately, work permit holders or those authorized to work in Canada can now purchase a home to live in while working in the country. Work permit holders must have 183 days or more of validity remaining on the permit at the time of the purchase, and cannot purchase more than one residential property, according to the statement.
The ban will also now not apply to vacant land zoned for residential and mixed-use, so non-Canadians can purchase such land with the potential of using it for residential development.
There will also now be an exception to allow non-Canadians, as well as publicly traded entities formed in Canada but controlled by a non-Canadian, to purchase residential property for the purpose of development.
In addition, the government will consider a privately-held corporation or entity to be foreign if a non-Canadian owns up to 10 per cent of its equity, up from three per cent.
“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” Housing Minister Ahmed Hussen said in a statement in CMHC’s release.
“These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”
Canada has been accepting record numbers of immigrants into the country, and the ban was previously criticized by some experts for not allowing them to purchase homes.
The foreign homebuyers ban was put in place to limit foreign investment in property that potentially could be taking away homes for Canadians, according to Hussen.
However, the policy has been criticized for not being the right approach to tackling housing affordability.
Elton Ash, ReMax executive president for Western Canada, told Global News in January that non-Canadian homeowners don’t make up a significant amount of real estate transactions.
“I can tell you with full confidence, (the ban) will have zero effect on house prices,” he said.
— with files from Global News’ Kathryn Mannie
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