Canada Makes Amendments to Foreign Homebuyers Ban – Here's What They Look Like

Canada has recently amended the legislation on the purchase of residential property by non-Canadians, allowing certain groups of non-Canadians to purchase residential properties in certain circumstances. These amendments come months after the ban on foreign homebuyers took effect on Jan. 1, and primarily affect work permit holders, as well as public and private corporations partially owned by foreigners. The changes, which took effect on March 27, aim to provide more opportunities for newcomers to put down roots in Canada and for businesses to create jobs and build homes by adding to the housing supply in Canadian cities.

Significant Changes Made Include...

One of the significant changes made is that anyone in Canada with a work permit can now purchase a residential property while working. This change is an exemption from the initial legislation that only provided exemptions for those on temporary work permits, requiring them to work full-time and file income tax returns for at least three out of the last four years. Permit holders now only need to have at least 183 days left on their work permit at the time of purchasing a home and cannot already own a residential property. Rules around tax filings and previous work experience have also been repealed.

Another Notable Amendment - Vacant Land

Another notable amendment is that the ban no longer applies to vacant land zoned for residential and mixed use, allowing non-Canadians to purchase this land and use it for any purpose, including residential development. Additionally, the exception that allows foreigners to buy residential property for the purpose of housing development now also applies to publicly traded companies formed in Canada and controlled by foreigners.

The final amendment involves an increase to the corporate foreign control threshold, considering a company to be foreign-controlled if a non-Canadian owns at least 10 per cent of the entity. The original three-per-cent threshold held back home developers that were partly owned by foreigners, and this change is much needed, according to the Canadian Home Builders’ Association.

Amendments to Foreign Homebuyers Ban- What This Means for Buyers

The ban on foreign investor activity among residential properties was initially introduced to make housing more affordable for Canadians, and the amendments aim to provide more opportunities for newcomers to Canada to put down roots and for businesses to create jobs and build homes. However, data from the CMHC released in 2017 shows that foreign buyers owned a minimal amount of residential properties in various Canadian cities.

While some market-watchers predict that the ban will create new buying opportunities for Canadians by freeing up supply, real estate experts have offered mixed reactions to the regulations when it comes to their impact on Canada's housing market.

Amendments to Foreign Homebuyers Ban- Conclusion

In conclusion, the amendments made to the legislation on the purchase of residential property by non-Canadians provide more opportunities for certain groups of non-Canadians to purchase residential properties in certain circumstances. These changes aim to create jobs, build homes, and help newcomers put down roots in Canada while making housing more affordable for Canadians. Whether or not the amendments will have a significant impact on the housing market remains to be seen, but they certainly provide more options for non-Canadians looking to purchase residential property in Canada.

If you are looking to purchase a home in Ottawa, contact us today to learn more.