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What is the Foreign Buyer Ban in Canada and Who is Affected?

It has been more than a year since the Federal Government legislated the Prohibition on the Purchase of Residential Property by Non-Canadians Act on January 1, 2023.  This act came into effect in an effort to make homes more affordable for Canadians, especially in highly populated cities.

On March 27, 2023, the Foreign Buyer Ban was amended to clarify issues that had arisen and to make new exceptions.

What is the Bill C-19 Foreign Buyer Ban?

Non-Canadians buyers will not be allowed to buy specific properties in Canada until the recent extension of the year 2027. The prohibition was initially in effect until January 1, 2025; however, on February 4, 2024, the federal government extended it to January 1, 2027 in response to Canada’s affordable housing shortage. The purpose is to make it easier for more Canadians to be able to purchase homes, by limiting the foreign buyer competition and therefore increasing the supply of houses.

According to the Bill C-19, a residential property is any building with three units or less, including semi-detached houses and condos. In the recent March amendment, it clarified that foreign buyers could buy properties for development purposes. However, this may not include buying for the purpose of rental development. Non-Canadians can buy larger buildings with four or more dwelling units. They can also buy recreational properties such as cottages, cabins, and vacation homes (generally speaking if located outside of a metropolitan area).

Anyone who breaks this law may be liable for a fine of up to C$10,000.00. This rule applies to any citizen who helps a non-Canadian break the law, directly or indirectly. And they may be ordered to sell their residential property.

Who is affected by this Ban?

The ban on the foreign homebuyers applies to a person who is:
– Not a Canadian Citizen
– Not registered as an Indian under the Indian Act
– Not a Permanent Resident
– A Canadian corporation whose shares aren’t listed on any stock exchange in Canada and controlled by someone who is non-Canadian

Following the March amendment, the following individuals are exempt from this ban (subject to certain conditions):
– Work Permit Holders
– Refugees
– Non-Canadians with Canadians spouses or common-law partners
– Temporary residents studying in Canada
– Diplomats and members of international organizations who are living in Canada

The Auxilium team stays on top of the latest news and industry changes to keep you informed. If you’re ready to get started on your home purchase, mortgage renewal or refinance, set up a free consultation with one of our planners today: call us toll-free at 1-855-590-6520 or visit us at #16-Unit 211-2840 Peatt Road during regular business hours. We can also arrange an appointment evenings or weekends to work with you. 

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