As of January 1, 2023, non-Canadians are now prohibited from purchasing residential real estate in Canada for a period of two years under the recently enacted Prohibition on the Purchase of Residential Property by Non-Canadians Act.1
Specifically, the Act prohibits the purchase of residential real estate by non-Canadians, defined as, individuals who are not Canadian citizens, permanent residents, or persons registered under the Indian Act.2 However, there are exemptions available for individuals who are international students or temporary residents3 with valid work permits who satisfy the requirements set out in the Regulations.4
The Act and Regulations set out which properties are residential property to which the Act prohibits the purchase of by a non-Canadian. Namely, residential property means;
- a detached house or similar building containing not more than three dwelling units;5
- a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit, or similar premises that is intended to be owned apart from any other unit in the building;6 and includes
- vacant land zoned for residential or mixed-uses and which is situated within a Census Metropolitan Area (“CMA”) or Census Agglomeration (“CA”).7
Notably, the Act does not apply to property situated in an area of Canada that is not within either a CMA or a CA.8
In Saskatchewan, there are two CMA's; Regina and Saskatoon, and eight CA's; Estevan, Lloydminster, Moose Jaw, North Battleford, Prince Albert, Swift Current, Weyburn, and Yorkton.
The CMA's and CA's in Saskatchewan cover a significant area of the province. However, there remains a large area of the province unaffected by the Act and Regulations. CMA's and CA's have definitive borders; a property on one side of the border may be subject to restrictions, while a property on the other side will not be. Therefore, anyone dealing in Saskatchewan real estate must consider whether the property they are working with is subject to the new restrictions.
It is important to note that the Act does not invalidate a sale which contravenes the Act.9 Implying that a contract for the sale or purchase of residential property is binding, regardless of the Application of the Act. However, the Act sets out that an individual who counsels, induces, aids, abets or attempts to counsel, induce, aid or abet a non-Canadian to purchase, directly or indirectly, any residential property knowing that the non-Canadian is prohibited under this Act from purchasing the residential property is guilty of an offence and liable on summary conviction to a fine of not more than $10,000.10
Further, if a non-Canadian is convicted under the Act, the Minister may apply to the superior court of the province where the residential property was purchased for an order to sell the impugned property.11 The proceeds of the sale will first be applied to any costs incurred to bring the application, and the residue will be repaid to the non-Canadian who violated the Act.12 However, the individual who violated the act will not be able to recover more than what they paid for the property.
Footnotes
1 Prohibition on the Purchase of Residential Property by Non-Canadians Act, SC 2022, c 10, s 235 (the “Act”).
2 The Act, s. 2.
3 See the Act, s. 4(2) and the Regulations, s. 5.
4 Prohibition on the Purchase of Residential Property by Non-Canadians Regulations, SOR/2022-250 (the (“Regulations”).
5 The Act, s. 2.
6 The Act, s. 2.
7 The Regulations, s. 3(2).
8 See the Act, s. 2 and the Regulations, s. 3(1).
9 The Act, s. 5.
10 The Act, s. 6(1).
11 See the Act, s. 7(1) and the Regulations, s. 7(1).
12 The Regulations, s. 7(2).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
