Extension of Non-Canadian Home Buyer Ban
Canada has decided to extend the Prohibition on the Purchase of Residential Property by Non-Canadians Act until January 1st, 2027, with the aim of increasing the availability of housing units for Canadian citizens. This extension adds two more years to the initial expiration date, which was set for the beginning of 2025.
Restrictions on Non-Canadian Purchases
Under this extended policy, non-Canadians, excluding Canadian citizens and permanent residents, are restricted from purchasing residential properties, defined as buildings with three dwelling units or fewer. This restriction also applies to semi-detached houses and condominium units within Census Metropolitan Areas and Census Agglomerations. However, non-Canadians remain eligible to purchase residential properties outside these designated areas.
Exceptions to the Prohibition
Exceptions to this prohibition include situations where non-Canadians acquire residential property due to divorce, separation, gift, or death, or when they rent a dwelling unit for occupancy. Other exceptions include instances where a creditor exercises a security interest, or when residential property is purchased for development purposes.
Allowances for Non-Canadians with Work Permits
Furthermore, non-Canadians holding valid work permits have been allowed to purchase mixed-use and commercial land since April 2023, provided they meet specific criteria, such as having at least 183 days remaining on their work permit and not owning more than one residential property in Canada.
Documentation Requirements
To comply with the Act, non-Canadians must provide documentation such as work or study permits issued by Immigration, Refugees and Citizenship Canada (IRCC), verification of status from IRCC, or other residency documents.
Penalties for Violations
Violations of the Act may result in criminal charges and fines of up to $10,000 CAD for non-compliant parties, along with potential orders for the sale of the property at no more than the purchase price. The Act also holds officers, directors, and representatives of violating corporations or entities accountable.
Government Housing Affordability Measures
The extension of this Act is part of a broader strategy by the Canadian government to address housing affordability issues, alongside initiatives like the Apartment Construction Loan Program and Housing Accelerator Fund.
Real Estate Trends
According to the Canadian Real Estate Agency (CREA), the average home price in Canada increased by 5.1% in December 2023 compared to the previous year, reaching $657,145 CAD. Additionally, there was a 5.8% increase in listings, resulting in 25,671 new homes for sale by the end of the year.
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