Canada Extends Ban On Foreign Ownership Of Housing Until 2027

Last Updated On 6 February 2024, 9:36 AM EST (Toronto Time)

The Canadian government is extending the ban on foreign ownership of housing in Canada, Deputy Prime Minister Chrystia Freeland said in a statement on Sunday.

The rule, originally announced in 2022 and implemented in January 2023, will now be extended until the beginning of 2027.

It prohibits foreign nationals and commercial enterprises from purchasing residential property in the country, with some exceptions for international students, refugee claimants, and work permit holders.

“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” Freeland said in a statement released on Sunday.

Some Canadian provinces already impose fees on foreign house buyers, and Toronto recently suggested a municipal levy on non-Canadian residential purchases.

Can temporary residents buy houses in Canada?

In short, temporary residents or individuals with a valid study or work permit may be permitted to acquire a home while the prohibition is in effect if they meet specific requirements.

Among other requirements for temporary residents, the Canadian government demands proof of intention to permanently remain and establish themselves in the country.

Homes are for Canadians to live in and should not be used as a financial asset class by foreigners. We are using all possible tools to make housing more affordable across the country—including by extending the ban on foreign ownership of housing in Canada. https://t.co/QWY0J9J1Sz
— Chrystia Freeland (@cafreeland) February 4, 2024

Can an international student with a study permit buy a house in Canada?

A student enrolling in an authorized program of study at a Canadian institution must meet at least one of the following requirements.

To be eligible for a residential property purchase,
- the buyer must have filed all required income tax returns for the previous five years.
- be physically present for at least 244 days in each of the previous five calendar years,
- purchasing house with price of no more than $500,000, and
- have not purchased more than one property.

It’s worth noting that a maximum purchase price of $500,000 may not be sufficient to buy a property in some major cities or provinces.

For example, in Ontario and British Columbia, the average property price still exceeds $700,000–800,000.

Can work permit holders buy a house in Canada?

Similarly, persons with a valid Canadian work permit must meet the following conditions:

They worked for at least three years in the four years preceding the year of purchase, assuming the work was full-time, as specified under subsection 73(1) of the Immigration and Refugee Protection Regulations (IRPA).
They have filed all required income tax reports under the Income Tax Act for at least three of the previous four taxation years and have not purchased more than one residential property.

This means that anyone interested in purchasing a house as a temporary worker must demonstrate that they have at least three years of full-time job experience in the previous four years.

Is Foreign Buyer Market Big?

Housing has become a key political flashpoint as Canadians grapple with a severe affordability crisis.

To achieve affordability, the Canada Mortgage and Housing Corp. (CMHC) estimates that 3.5 million extra homes must be built by 2030, in addition to the predicted increases.

Experts have questioned whether the ban has a substantial impact on the affordability of residential properties, given that non-Canadians possess a small share of the entire market.

In 2020, for example, non-residents’ market participation in several provinces varied from two to six percent.

In 2021, international buyers accounted for only about 1.1% of all house sales in British Columbia.

There are also additional exclusions to the home-buying laws that allow for the purchase of buildings with four or more residences or in less densely populated areas.

What is the penalty for an ineligible temporary resident buying a house in Canada?

A foreign investor or an ineligible temporary who finds a means to purchase a restricted residential property in Canada, or anybody who knowingly supports them, will have committed an infraction punishable by a $10,000 fine.

Additionally, the superior court of the province in which the property is located may order that it be sold.

When did the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act went into effect on January 1st, 2023, leaving many people concerned about their ability to buy a home.

Gagandeep Kaur Sekhon

Gagandeep Kaur Sekhon moved to Canada in 2010 on a study visa. She navigated through the ups and downs of her student life and gained her permanent residency in 2015. Today, she is a proud Canadian citizen residing in Calgary, Alberta. She is mother of 2 beautiful daughters and making her difference through writing and guidance at INC – Immigration News Canada.