Starting early next year, new federal legislation will come into effect that prohibits foreign buyers from directly or indirectly purchasing real estate across Canada for the next two years.
In response to rising real estate prices across the country, the Government of Canada has enacted the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the "Act"). The Act will come into effect on January 1, 2023, and continue until December 31, 2024. During this time, non-permanent residents and non-citizens of Canada are banned from purchasing residential property in the country, including detached, semidetached, condominiums and all other prescribed real property.
There are some exceptions under the Act, including temporary residents, protected persons, and/or a non-Canadian who purchase property with their spouse or common law partner if that spouse or common law partner is entitled to purchase property under the Act.
Failing to act in accordance with the Act, whether that be by purchasing property as a non-Canadian or by aiding a non-Canadian in purchasing property may result in a fine up to $10,000 and the property may be ordered to be sold by a court of law. The Act also specifically prohibits non-Canadians from using a corporation to purchase property.
Regulations are expected which will provide more clarity regarding the Act including the scope of the ban, exceptions, and other information.
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.