Navigating Canada’s New Foreign Buyer Ban

A hot topic heading into the New Year is the new Foreign Buyer Ban in Canada.

Associate Jasmine Somal explains the Ban, including the known exceptions, and how FH&P Lawyers can help navigate this evolving market.

What is Canada’s New Foreign Buyer Ban?

As of January 1, 2023, there will be a new Foreign Buyer Ban implemented in Canada under the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”). The Act will be in force for a period of two years. The purpose of the Act is to prohibit the direct and indirect purchase of residential property by non-Canadians to reduce the impact of inflation in Canada.

What is Residential Property?

Residential Property is defined under the Act as any real property or immovable that is situated in Canada. There are some restrictions in terms of the type and size of the real property. Additional details, the scope of the ban and exceptions are expected to be released soon.

Who is a non-Canadian?

As per section 2 of the Act, a non-Canadian is defined as:

• an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
• a corporation that is incorporated otherwise than under the laws of Canada or a province;
• a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b); and
• a prescribed person or entity. (non-Canadian)

Are there any Exceptions?

Yes! The new Foreign Buyer Ban is not applicable to the following:

1. A temporary resident within the meaning of the Immigration and Refugee Protection Act who satisfies prescribed conditions (to be released).
2. A protected person within the meaning of subsection 95(2) of that Act.
3. An individual who is a non-Canadian and who purchases residential property in Canada with their spouse or common-law partner if the spouse or common-law partner is a Canadian citizen, person registered as an Indian under the Indian Act, permanent resident or person referred to in 1 or 2.
4. A person of a prescribed class of persons (to be released).

Are there any Penalties?

Any non-Canadian that contravenes the Act, and anyone that knowingly assists the non-Canadian in directly or indirectly purchasing residential property in Canada is guilty of an offence and liable on summary conviction to a fine of not more than $10,000.

How Can We Help?

We understand that navigating Canadian Immigration Law in conjunction with purchasing property in the ever-evolving Canadian market can be a confusing process and we are here to help make the process simpler for you.

In order to assess whether the New Foreign Buyer Ban will impact you, please click HERE for a free assessment.

If you have any further questions or would like our assistance in navigating the Canadian immigration process or have questions regarding the new Foreign Buyer Ban and would like to speak to an immigration attorney, please contact our law firm to schedule an initial consultation with a lawyer in Kelowna, Westbank, or Penticton.