In an effort to address housing affordability concerns, the Government of Canada introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act, a two-year ban on foreign buyers. However, industry stakeholders raised concerns about some of the details in the legislation, prompting the government to unveil four key amendments. These changes aim to strike a balance between maintaining affordability and promoting housing development. In this blog, we will explore the amendments and their implications for the Canadian real estate market.
- Work Permit Holders Exempt:
Initially, the ban included non-Canadian work permit holders, which critics argued contradicted the government’s immigration goals. As a result, work permit holders are now exempt from the ban as long as they have 183 days or more of validity remaining on their work permit. This amendment allows skilled workers to secure housing without facing the same restrictions as other non-Canadians.
- Vacant Land Purchases Allowed:
The original legislation restricted non-Canadians from purchasing vacant land zoned for residential or mixed use. However, this limitation has now been lifted. This change provides non-Canadians with the opportunity to invest in and develop vacant land, which may contribute to an increase in housing availability and stimulate economic growth in the real estate sector.
- Development Purchases Permitted:
Non-Canadians can now purchase residential property for development purposes. Previously, this exception was only applicable to publicly traded corporations. By extending this exception to non-Canadians, the government encourages investment in housing development, which may help to alleviate the housing supply shortage in the country.
- Increased Foreign Control Threshold:
The ban initially prevented privately held corporations or entities from purchasing residential property if a non-Canadian owned 3% or more. Developers expressed concerns that the 3% threshold was too restrictive and could hinder new housing development. In response, the government increased the foreign control threshold to 10%, providing developers with more flexibility and encouraging further investment in the housing market.
These four key amendments to Canada’s foreign buyer ban demonstrate the government’s commitment to addressing housing affordability concerns while maintaining a balanced approach that encourages development and investment in the real estate sector. As industry stakeholders continue to monitor the impact of these changes, it is crucial for potential buyers, investors, and real estate professionals to stay informed and adapt to the evolving market landscape.