The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the "Act")
As of 1st January 2023 the Act came into effect prohibiting non-Canadians from purchasing residential property in Canada, with some exceptions. The prohibition is temporary and will be in place for two-years. The Act effectively prohibits any non-Canadian citizen, a person registered as an Indian , or a permanent resident of Canada from purchasing residential property in Canada.
Corporations that are not incorporated pursuant to the laws of Canada or a Canadian Province, or whose shares are not listed on a stock exchange in Canada, are also prohibited from purchasing residential property. Residential property is defined in the Act and includes most residential real property and immovable property.
There are some exceptions to the ban (including, by way of example but not limited to, temporary residents, protected persons under the Immigration and Refugee Protection Act, S.C. 2001, c. 27., and certain exemptions provided for by way of the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations: SOR/2022-250 ).
Any non-Canadian who contravenes the Act and every person or entity, who knowingly assists a non-Canadian in purchasing residential property, is guilty of an offence and liable on a summary conviction and a fine of not more than $10,000.00. A contravention of the Act does not affect the validity of the sale, but it allows the Minister to apply for an order that the residential property be sold. If the sale is ordered, the non-Canadian will not receive any more from the sale proceeds than the purchase price they paid for it.
While this legislation has made headlines around the world, it remains to be seen whether it will have any effect on housing affordability in Canada.
For further information contact Alexandra Maltas - Whitelaw Twining
Read more global construction insights
References
- S.C. 2022, c. 10, s. 235
- Under the Indian Act, R.S.C. 1985, c. I-5,
- Canada Gazette, Part 2, Volume 156, Number 26 : Prohibition on the Purchase of Residential Property by Non-Canadians Regulations. Retrieved on January 14, 2023: https://canadagazette.gc.ca/rp-pr/p2/2022/2022-12-21/html/sor-dors250-eng.html
