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What you need to know about the Canadian Foreign Homebuyer Ban 2023

    Canadian Foreign Homebuyer Ban 2023

    What Is It?

    As of Jan 1 2023 for a 2-year period, anyone who’s neither a Canadian citizen nor a permanent resident cannot purchase property in select areas.

    Key Points

    The Foreign Homebuyer Ban includes entities controlled by someone who is a non-Canadian, such as partnerships and trusts. It also includes any corporations incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada and which are controlled by someone who is non-Canadian. Plus, any entities formed otherwise than under the laws of Canada or a province.

    Includes Anything “Residential”

    • Detached house or similar building, containing not more than three dwelling units,
    • Semi-detached house, rowhouse unit, residential condominium unit or similar premises.
    • Land containing any habitable dwelling or vacant property that is zoned for residential or mixed use.

    Exemptions for Properties and Transfers

    • Properties with more than 3 units that are deemed “residential”, includes fourplexes.
    • Any property NOT in the Census Metropolitan Area or Census Agglomeration (see green areas in map here:) https://www150.statcan.gc.ca/n1/pub/92-195-x/2021001/geo/cma-rmr/cma-rmr-eng.htm
    • Acquisition by an individual of an interest or a real right resulting from death, divorce, separation or a gift.
    • Rental of a dwelling unit to a tenant for the purpose of occupancy by tenant.
    • The transfer under the terms of a trust that was created prior to coming into force of the Act.
    • The transfer resulting from the exercise of a security interest or secured right by a secured creditor.

    Penalties

    • Fines up to $10,000.
    • Court order sale of home purchased by a nonCanadian in violation of the act.

    Exemptions for Individuals

    • Students considered temporary residents, if all apply:
    • Must be enrolled in an authorized designated learning
      • Must be enrolled in an authorized designated learning institution.
      • Must have filed tax returns for each of the 5 taxation periods prior to purchase and have been physically present in Canada for 244 days minimum for each of the 5 calendar years.
      • Must have not previously purchased residential real estate.
      • Can only purchase a property not exceeding $500,000.
    • Temporary work permits, if all apply:
      • Must hold valid work permit
      • Must have worked full time for 3 out of 4 years before purchase and have filed tax returns for the 3 of 4 taxation years.
      • Have not previously purchased residential real estate.
    • Refugees and claimants of Refugee Protection act.
    • Foreign Ministers with valid passport.
    • Spouse or common law partners of Canadian citizens and residents.
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    Important Information to Know

    • Anyone who knowingly assists a buyer with the purchase of residential real estate is liable under the act.
    • If the contract is completed before January 1st 2023, but the transaction has not closed, it is still a valid transaction.
    • Refinances are impacted only when the purpose of the funds are to purchase property.
    • Fourplexes and recreational properties such as cottages and lake houses are exempt from the Foreign Homebuyer Ban.
    • No clear indication yet on how the government will track and enforce this.
    • Does not address international monies that flows in from other countries for Canadian residents to purchase.
    • There is still area to purchase just outside of major city centres – any areas not deemed Census metropolitan areas.