Some foreign buyers will no longer be able to purchase homes in Mississauga, Brampton, Hamilton and rest of Canada come Jan. 1
Published December 31, 2022 at 11:48 am
In a bid to make housing–which has become extraordinarily expensive in many parts of the country–more affordable, the federal government is pausing residential real estate purchases by some foreign buyers starting tomorrow.
The federal government’s Prohibition on the Purchase of Residential Property by Non-Canadians Act, which effectively prohibits some foreign individuals and entities from purchasing homes in the country, will come into effect on Jan. 1, 2023.
The legislation prohibits non-Canadians and out-of-country corporations from buying residential property in the country for two years.
According to the CMHC, the act defines residential property as buildings with three homes, as well as parts of multi-unit dwellings such as semi-detached houses and condos.
The law does not prohibit the purchase of larger buildings with multiple units, and it does allow some exceptions for non-Canadians who are working to become permanent residents by studying or working in the country.
The new legislation also doesn’t apply to refugees, diplomats, some international students who meet specific criteria, consular staff and members of international organizations who live in Canada.
The legislation will not apply to non-Canadians who are renting property.
Individuals or businesses who violate the act (or who help someone else make a purchase prohibited by the legislation) could face fines of up to $10,000 and be forced to sell the property.
The move comes at a time when other levels of government are also trying to cool the market–which has already seen some price declines due to rising interest rates–by placing restrictions on non-Canadian purchasers.
Earlier this year, the Ontario government increased the tax paid by foreign homebuyers to 25 per cent from 20 per cent–a move that some experts said would have a limited impact because of the federal government’s incoming ban.
While housing prices remain high in various parts of Canada, typically white-hot markets (such as the Greater Toronto Area) have seen price decreases in the latter part of 2022.
According to the Toronto Regional Real Estate Board, the average selling price for all home types combined was down by 7.2 per cent year-over-year in the region in November, with greater price declines seen in the detached and semi-detached markets.
That said, the average selling price in the region still sits at the $1.08 to $1.09 million mark and has since August 2022.
– With files from The Canadian Pressinsauga's Editorial Standards and Policies advertising