Why Canada Ban on Foreign Residential Property Buyers?

Well, Canada closed the door to foreign property buyers for 2 years. The Prohibition on the Purchase of Residential Property by Non-Canadians Act went into effect on January 1, 2023.

The Canadian Housing Minister says that the house should not be a “commodity” which is why the banning will solve the housing crisis in Canada.

The Canadian Mortgage and Housing Community (CMHC) says that the goal of the ban is to make the home affordable and for Canadians. Canadian politicians believe that the rise in housing market prices is caused due to domination of foreign buyers and profiteers.

The housing price in Canada rose drastically in the year 2020-2021.

Who are the Exceptions to the Ban?

The act prevents non-Canadians from buying residential properties. Here the non-Canadians are those who are not:

• Canadian Citizen
• Immigrant
• Permanent Resident
• International Students meeting the criteria of spending the previous five years of time in Canada will be allowed to buy property for no more than $500,000.
• Workers who worked for 3 years in Canada and have filed tax returns
• Diplomats, members of international organizations working in Canada
• Non-resident married to a citizen

A non-Canadian person or corporation can’t buy a property through any partnerships or trusts. Here the non-Canadians are:

• Privately owned corporations
• Not listed on Canada Stock Exchange
• Corporations controlled by non-Canadians

Knowing to help non-Canadians buy property in Canada can be fined up to $10,000. The regulation in act defines control as direct or indirect participation or ownership of shares and assets.

The non-Canadian can’t have 3% or more share ownerships, in general, the non-Canadian can not be majority shareholder in the corporations.