Revisions to Canada's Foreign Homebuyers Policy: What You Need to Know
Amendments to Canada's Foreign Homebuyers Policy - Recently, the Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion, introduced changes to the accompanying Regulations of the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
The Act, sanctioned by Parliament on June 23, 2022, and enacted on January 1, 2023, is part of the Government of Canada's initiative to enhance housing affordability for Canadian citizens. The corresponding regulations were formulated to outline specific exceptions, definitions, and clarifications necessary for implementing the ban.
To provide newcomers and businesses with greater flexibility in contributing to Canada's housing sector, the Government of Canada is introducing amendments to the Regulations. These changes will broaden exceptions to allow Non-Canadians to purchase residential properties under specific conditions. This move aims to support individuals and families seeking to establish their lives in Canada by encouraging earlier homeownership and addressing housing supply challenges. These amendments came into effect on March 27, 2023.
The Minister of Housing and Diversity and Inclusion has unveiled the following modifications:
1. Facilitating property purchases for work permit holders
The amendments will allow those with valid work permits or authorizations under the Immigration and Refugee Protection Regulations to buy residential property. Eligible work permit holders must possess at least 183 days of validity on their permits during the time of purchase and must not own more than one residential property. Requirements concerning tax filings and prior work experience in Canada will no longer be applicable.
2. Eliminating restrictions on vacant land
Section 3(2) of the regulations is being repealed, exempting vacant land zoned for residential and mixed-use from the prohibition. This alteration permits non-Canadians to purchase such land and utilize it for various purposes, including residential development.
3. Exception for property development
This amendment enables non-Canadians to purchase residential property for development purposes. The exception will also extend to publicly traded entities established under Canadian or provincial laws, provided they are controlled by a non-Canadian. This inclusion builds upon the existing exception for publicly traded corporations under the Act.
4. Raising the corporation foreign control threshold
For privately held corporations or entities controlled by non-Canadians, the control threshold for the prohibition is being raised from 3% to 10%. This adjustment aligns with the definition of 'specified Canadian Corporation' in the Underused Housing Tax Act.
"To provide greater flexibility to newcomers and businesses seeking to contribute to Canada, the Government of Canada is making important amendments to the Act’s Regulations. 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. 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."
— The Hon. Ahmed Hussen, Minister of Housing and Diversity and Inclusion
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