Starting January 1, 2023, non-Canadians and non-permanent residents will be prohibited from purchasing residential property in Canada for two years. The Act will be repealed on January 1, 2025.
The new law does not apply to commercial real estate.
You would expect the ban to cover all the residential real estate in Canada. This is not the case.
You can find out what areas are covered by the restriction by googling:
“Stats Canada’s Census metropolitan areas and census agglomerations, 2021 map”.
You see that the ban covers many cities and municipalities. One notable exception is Whistler.
“Residential Property” is defined as buildings of up to 3 dwelling units and parts of buildings, like semi-detached houses or condominium units.
Also included in the definition is vacant land with no habitable dwelling zoned for residential or mixed-use.
The Act restricts non-Canadians from avoiding the ban by using corporations, partnerships and trusts. The threshold for foreign control is low: only 3%!
If your daughter is a non-Canadian living in the USA and owns more than 3% of the voting shares of the family holding company, the company will be subject to the ban.
Exemptions
- Canadian Citizens or Permanent residents
- Refugees
- Non-Canadians who purchase residential property with their spouse or common-law partner as long as the spouse or common-law partner is eligible to purchase residential property in Canada.
- Temporary residents including students and those holding a work permit who must meet an additional set of conditions.
Every non-Canadian who breaks the rules is subject to a fine of not more than $10,000. If the non-Canadian purchases the property and sells it at a profit, the purchase price is refunded but the gain must be paid to the government.
A “non-Canadian” is defined essentially as:
– an individual who is not a Canadian or permanent resident;
– a corporation or entity formed outside of Canada
– a Canadian entity controlled by one of the above
