Foreign Home Buyer ban amended, and now extended.
Put into effect last year, this ban has now been extended another two years until 2027.
A ban to prevent speculative foreign home buying was enacted by the federal government on Jan. 1, 2023 and then loosened three months later to allow (some) new Canadians participating in our economy a place to call home.
Changes to allow a welcome (home) for newcomers.
The original Foreign Buyer Ban was amended on Mar. 27, 2023, by the Minister of Housing and Diversity and Inclusion.
Officially called the Prohibition on the Purchase of Residental Property by Non-Canadians Act, it was introduced as a ban for foreign buyers and groups to free up more housing for on-the-soil Canadians and is now in place until at least the beginning on 2027.
Here are the 4 amendments introduced.
Many detractors labelled the original ban rules as too restrictive, with unintended consequences, such as preventing increases to our housing supply and deepening rental market woes. It was accused of essentially pulling the 'welcome mat' out from under newcomers actively participating in our economy (who aren't just buying a home from afar for it to sit vacant).
To ease the ban's criticism and improve newcomer and foreign company inclusion:
1. Fewer restrictions for Work Permit Holders to buy a primary home in Canada.
If you have permission to work in Canada and a valid work permit, you can buy your first primary property with at least 183 days or more left on your permit (i.e. if you don't own other properties in Canada). You no longer have to provide a long history of tax filings or work experience.
2. Ban no longer applies to vacant land.
Non-Canadians can now buy empty land that's zoned for homes, or a mix of homes and businesses, for the buyer to use for any purpose, including building a house.
3. Exception in buying for development purposes:
This amendment now allows non-Canadians to purchase residential property for the purpose of development (to allow for the building of more housing units).
4. Corporation foreign control threshold goes from 3% to 10%.
The original ban restricted companies from residential development or investment if more than 3% of owners were deemed non-Canadian. That threshold has increased to 10% to align with the definition of 'specified Canadian Corporation' in the Underused Housing Tax Act.
Have questions about buying a home in Canada?
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You may find our First-Time Home Buyer's Guide useful if you're starting to look for a home, with a Newcomers to Canada addition coming soon.
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