A two-year federal ban to stop non-Canadian people and corporations from buying residential property takes effect Jan. 1. This is a step that should help make housing more affordable for people living in this country.
The legislation comes with a number of exceptions, including international students and refugees. But some critics say it still goes too far.
Here’s what you need to know about how it works:
The Prohibition on Acquisition of Residential Property by Non-Canadians Act prevents “non-Canadians” and corporations controlled by non-Canadians from acquiring residential property. “Non-Canadian” means someone who is not a Canadian citizen, permanent resident or person registered as an Indian under the Indian Act. But there are a number of exceptions.
“The ban is a temporary two-year measure that is part of the government’s response to the urgent concerns of Canadians about housing affordability,” a spokesperson for the Minister of Housing, Diversity and Inclusion said in a statement sent in response to questions. movement. “It is also expected to help reduce the flow of foreign money into Canada to buy residential real estate.”
Ontario and BC have excess taxes for foreign home buyers. Statistics on foreign home ownership are hard to come by, but in 2017 Statistics Canada estimated that 3.4 per cent of all residential properties in Toronto and 4.8 per cent in Vancouver were owned by non-residential properties. residents. Those numbers were even higher for condos: 7.2 percent in Toronto and 7.9 percent in Vancouver.
What happens if you break this law?
If a non-Canadian buys a home under this new law, they could be fined up to $10,000 and the home could be sold. Not applicable to renters.
What are the exceptions?
International students are exempt from this ban if they meet a number of requirements, including buying property under $500,000. Excluded are temporary foreign workers who have worked in Canada for at least three years and meet certain other conditions, as well as refugees and refugee claimants. So are accredited members of foreign missions in Canada.
Regulations do not apply if they conflict with existing treaty rights of Indigenous Peoples.
Stephen Crain, president and CEO of the Canadian Workforce Migration Council, said the three-year limit “runs counter to the government’s overall goals of attracting the brightest and best to our country.” Under the new rules, if someone moves to Canada to work, they cannot get a place right away. Also, if someone recently moved to Canada from another country and already owns a home, they won’t be able to buy a new one if they need to move to another city, he noted.
His group is also concerned that relocation companies, which sometimes buy workers’ homes if they need to move quickly, won’t be able to buy homes under the new arrangement because most of them aren’t Canadian-owned.
Also, American or multinational companies will not be able to buy workers’ homes so they can relocate.
“At a time when we have to move people around the country, it’s handing out a lot of these companies,” he said.
Canadian Real Estate Association (CREA) CEO Michael Bourque noted that permanent residents do not immediately have such status when they arrive in this country.
“Given that we’re in a global competition for talent,” saying “you can come but you can’t buy a house” sends a “terrible message” to everyone from AI experts to carpenters.
What is residential property?
This is defined as buildings with up to three units and parts of buildings such as semi-detached houses and condos. The law does not apply to buildings larger than several blocks.
Where is it applied?
The law only applies to residential properties in Census Metropolitan Areas or Census Agglomerations, in other words, places where the largest number of Canadians live. In case of doubt, the federal government has provided a map showing where the law does and does not apply.
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