Ottawa amends flawed foreign-homebuyer ban
April 5 2023
The federal government has amended its Prohibition on the Purchase of Residential Property by Non-Canadians Act, a two-year ban on foreign buyers that came into force January 1, 2023.
This move follows intense criticism from residential and commercial real estate sectors, including the Canadian Home Builders’ Association which pointed out the ban would stunt residential development and financing. Critics claimed the Act was rushed into law with a lack of foresight or industry consultation.
he March 27 amendments are effective immediately and include the following:According to the Minister of Housing and Diversity and Inclusion.
Vacant land exempt: Section 3(2) of the regulations is amended, so the prohibition does not apply to lands zoned for residential and mixed use. Vacant land zoned for residential and mixed use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development.
Residential development allowed: This exception allows non-Canadians to purchase residential property for the purpose of development. The amendments also extend the exception currently applicable to publicly-traded corporations under the Act to publicly-traded entities formed under the laws of Canada, or a province, and controlled by a non-Canadian—including real estate investment trusts.
Increasing foreign ownership: The threshold of foreign ownership of a Canadian private corporation exempt from the ban has been increased from 3 per cent to 10 per cent. This aligns with the definition of “specified Canadian corporation” in the Underused Housing Tax Act.