Recent Amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations
This Thought Leadership article is a follow-up to our January 2023 article on the introduction of the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect (“the Act”). The Act was implemented, in part, to ensure that residential homes in Canada were sold to Canadian buyers. It has the effect of limiting non-Canadians from purchasing residential property in Canada for a period of two years.
Amendments to the Act and Regulations were recently released and implemented on March 27, 2023. These amendments expand the eligibility of some foreign nationals to purchase residential property in Canada.
As noted in our previous article, foreign workers were among those generally restricted from purchasing residential property in Canada. While there was a limited exemption carved out for certain foreign workers, it was necessary to have worked in Canada on a full-time basis for at least three years within the last four years to be eligible to purchase residential property in Canada.
The March 27th amendments have loosened these restrictions. Foreign workers in Canada can now purchase homes if they meet the following requirements:
- they have a valid work permit or are authorized to work in Canada under the Immigration, Refugee Protection Regulations;
- their work permits or work authorization are valid for at least 183 days (6 months) or more at the time of purchase; and
- they have not purchased more than one residential property.
In addition to addressing the limiting work experience requirements, the amended Regulations also repeal the previously imposed tax filing requirements for foreign worker buyers.
Allowing more foreign workers to purchase residential properties is a significant amendment to the Act. As noted in our January 2023 article, the previous eligibility requirements could make Canada a less desirable location for international talent and would potentially pose a chilling effect on recruitment efforts at a time when our government is working diligently to address our nation-wide labour shortages.
The new amendments alleviate concerns for many prospective foreign workers who will now be eligible to purchase property soon after their arrival to Canada, allowing them to settle more quickly, which supports retention efforts.
Additional amendments that came into effect on March 27th include:
- Vacant land that is zoned for residential or mixed use can now be purchased by non-Canadians and used for any purpose including residential development.
- An exception was introduced to allow residential property to be purchased by non-Canadians for development purposes. This exception also extends to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian.
- For prohibition purposes, the control threshold was changed from 3% to 10% for privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian.
This update is intended for general information only. If you have further questions about these programs or are an employer seeking to support your workers, please contact a member of our Immigration Group.
Click here to subscribe to Stewart McKelvey Thought Leadership.