What is the Non-Canadian Residential Real Property Purchase Act?

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ATTENTION: The law is partially modified (announcement of March 28, 2023) Details to follow.

Our brokers believe that this legislation is not appropriate, especially for temporary residents who should have the opportunity to move to Canada with their families. We believe that skilled workers who move to Canada should have the right to own property to live in and not for speculative purposes.

We invite you to sign this petition to challenge the law to prohibit the purchase of real estate by non-Canadians.

UPDATE : 31/01/23

On January 31, 2023, the court stated in its judgment that promises to purchase and sell entered into by a non-Canadian before January 1, 2023 are not covered by the law prohibiting the purchase of residential real estate by a non-Canadian.

Therefore, if you are a non-Canadian and you signed a promise to purchase or sell before January 1, 2023, you can still proceed with the purchase or sale of this property despite the implementation of this new law.

We will be sure to update our articles as we receive information.

What does this law say?

As a reminder, the Act prohibits non-Canadians from purchasing residential real estate in Canada for a period of 2 years as of January 1, 2023, with some exceptions.

Definitions to remember

The term “non-Canadian”

Non-Canadian” should be understood as anyone who is not ;

  • Canadian citizen
  • permanent resident
  • native

The same applies to all companies located in Canada that are ;

  • private
  • controlled by a non-Canadian

A “residential building”.

The ban includes:

  • detached or similar one- to three-unit detached houses
  • semi-detached houses
  • condominiums
  • vacant land where the land has been selected for residential or mixed use and is located in a metropolitan area or census agglomeration. We invite you to check the Statistics Canada census tract reference map to see if your residential property is located in a metropolitan area or census agglomeration.

What are the exceptions to this law?

  • permanent residents
  • the temporary resident, under conditions :

– have a valid study permit, as long as these conditions are met:

→file all tax returns for the 5 tax years prior to the purchase

→ be present on Canadian territory at least 244 days per year for the last 5 years prior to the purchase

→ the purchase price must not exceed $500,000

→ only one residential property must be purchased

– to have a work permit, as long as these conditions are met:

→ the employment was full-time for at least 3 years during the 4 years prior to the purchase

→ file all tax returns for at least 3 years in the 4 years prior to purchase

→ only one residential property must be purchased

  • refugees
  • a non-Canadian who purchases a residential property with his or her spouse or common-law partner, as long as the spouse or common-law partner is eligible to purchase a property in Canada
  • accredited persons from a foreign mission who have a valid diplomatic, consular, official or special representative acceptance issued by the Chief of Protocol of Canada.
  • in case of acquisition of the property through inheritance, gift, divorce or separation
  • in the case of a transfer from a trust created before January 1, 2023
  • in the event of a transfer under a security interest or other secured interest

FAQ

Are purchase requests submitted after January 1, 2023 valid?

UPDATE : 31/01/23

On January 31, 2023, the court stated in its judgment that promises to purchase and sell entered into by a non-Canadian before January 1, 2023 are not covered by the law prohibiting the purchase of residential real estate by a non-Canadian.

Therefore, if you are a non-Canadian and you signed a promise to purchase or sell before January 1, 2023, you can still proceed with the purchase or sale of this property despite the implementation of this new law.

We will be sure to update our articles as we receive information.

Is any application for a mortgage refinance or transfer by a non-Canadian still valid?

Yes, all transactions that do not involve a purchase are still valid for a non-Canadian.

Are U.S. residents in Canada covered by the exceptions to the Act?

No, not all U.S. resident buyers who do not qualify as “Canadian” are exempt from this ban.

What impact does the Act have on mortgage pre-approvals or conditional approvals for purchases?

From now on, any application for mortgage pre-approval is subject to the same restrictions and exceptions set forth in this Act.

Is there an impact on unsecured loans?

This Act does not affect unsecured loans.

Are four-unit multiplexes affected by this law?

No, the Act defines residential buildings as consisting of no more than three units. Therefore, four-unit multiplexes are permitted to be purchased by a non-Canadian.

Are cottages or second homes affected by this ban?

The purpose for which your property is used does not determine whether or not you are allowed to purchase. The prohibition applies to all properties within a census metropolitan area or census agglomeration.

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