The federal government has announced several amendments to the regulations supporting the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
The Act came into force on January 1, 2023. As a result of lobbying efforts by many, including REALTORS®, the government has announced the following amendments to expand exceptions allowing non-Canadians to purchase a residential property in certain circumstances, especially as they relate to newcomers and businesses looking to add to Canada’s housing supply.
As such, the following changes have been announced and came into force on March 27, 2023:
- Enable more work permit holders to purchase a home to live in while working in Canada.
The amendments will allow those who hold a work permit or are authorized to work in Canada under the Immigration and Refugee Protection Regulations to purchase residential property. Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at time of purchase, and they have not purchased more than one residential property. The current provisions on tax filings and previous work experience in Canada are being repealed. - Repealing existing provision so the prohibition doesn’t apply to vacant land.
Repealing section 3(2) of the regulations, so the prohibition does not apply to all 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. - Exception for development purposes.
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. - Increasing the corporation foreign control threshold from 3% to 10%.
For the purposes of the prohibition, with regards to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian, the control threshold has increased from 3% to 10%. This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.
TRREB will continue to update Members on any developments as they become available. To refer to our previous posting on this topic, click here.
Important Resources
Access more information on the Amendments to the Act’s Regulations on the Frequently Asked Questions page of the CMHC website.
Click here to access more information on the Foreign Buyer Ban.
Disclaimer:
The information contained in this document is for general guidance only and is not to be construed as legal or other professional advice. It should not be used as a substitute for consultation with legal or other competent advisers. Before making any decision or taking any action, you should consult a professional. TRREB takes no responsibility for any errors or omissions in connection with the use of this information.