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Canada has recently imposed a foreign buyer ban aimed at curbing the influx of foreign investors. This policy has a significant impact on those interested in buying a house as a non-resident. On January 1, 2023, the Canadian government introduced a ban on foreign homebuyers. The legislation, known as Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act, was aimed at cooling down the country’s hot real estate market and making it more accessible to Canadians. Months after the ban took effect, the Canada Mortgage and Housing Corporation (CMHC) announced several amendments to the legislation, allowing non-Canadians to purchase residential properties in certain circumstances.

What is the Foreign Buyer Ban?

The Foreign Buyer Ban is a law that prohibits non-Canadians from purchasing residential properties in Canada, with some exceptions. The ban applies to all non-Canadian buyers, including corporations that are not Canadian-owned. The ban was introduced to help cool down Canada’s hot real estate market, which has been fueled by foreign investment in recent years. The ban is aimed at making housing more affordable for Canadians by reducing demand from foreign buyers.

buying a house as a non-resident

What are the Amendments to the Ban?

The amendments to the Foreign Buyer Ban were introduced on March 27, 2023. The changes primarily affect work permit holders, as well as public and private corporations partially owned by foreigners. The amendments are designed to allow newcomers to put down roots in Canada through homeownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities.

Under the new rules, the ban will no longer apply to vacant land zoned for residential and mixed-use. This means non-Canadians are now able to purchase this land and use it for any purpose, including residential development. Additionally, another exemption is being made to allow foreigners to buy residential property for the purpose of housing development. Based on the amendments, this exception now also applies to publicly traded companies formed in Canada and controlled by foreigners.

The final of four amendments introduced by the federal government involves an increase to the corporate foreign control threshold. The legislation now considers a company to be foreign-controlled if a non-Canadian owns at least 10 percent of the entity. Previously, the threshold was three percent.

 What Does This Mean for Canadians?

The amendments to Canada’s Foreign Buyer Ban are designed to help make housing more affordable for Canadians while still allowing non-Canadians to put down roots in Canada through homeownership. By allowing non-Canadians to purchase vacant land for residential and mixed-use, the amendments are expected to increase the housing supply in Canadian cities. While the impact of the amendments on Canada’s housing market remains to be seen, they are certainly a step in.