Foreign Home Buyer Ban – Extends to January 1, 2027

Effective January 1, 2023, the Government of Canada imposed a new law to ban non-Canadians (individuals and corporations) from purchasing residential property in Canada for two years.

The federal government has announced few exceptions, including foreign workers and international students who plan to live in Canada in the long-term.

The details of the legislation can be viewed here.  Particularly, the exception for temporary residents is referred to the meaning under “Immigration and Refugee Protection Act”

Under the Division 10 of the General provision, temporary resident includes temporary Visa, work permits, and study permits holders.

There is another catch for properties located in Ontario purchased by non-residents. Effective October 25, 2022, the Ontario Non-Resident Speculation Tax (NRST) has expanded and rate was increased from 20% to 25%.  This NRST applies on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent resident of Canada) or by foreign corporations or taxable trustees.

A rebate of NRST may be available for foreign nationals who become permanent residents of Canada.  To qualify for this rebate, the foreign nationals must:

• Become permanent residents of Canada within four years from the date of purchase;
• Own the property alone or with their spouse or common-law partner; and
• Occupy the property as their principal residence for the duration of the period that begins within 60 days after the date of purchase.

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.