Deputy Prime Minister Chrystia Freeland announced on Sunday that Canada is extending the ban on foreign ownership housing in the country.
The rule, first introduced in 2022 and put into action in January 2023, will now stay in place until the beginning of 2027. This law started on January 1st, 2023, making it harder for non-Canadians to buy homes here, which worries many people who want to buy a home.
This rule stops people from other countries and businesses from purchasing houses in Canada, with a few exceptions for international students, refugees, and those with work permits.
“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class.”Deputy Prime Minister Chrystia Freeland
Some provinces in Canada already charge fees to foreign home buyers, and Toronto is thinking about adding a local tax on non-Canadian home purchases.
Can people living in Canada temporarily buy houses?
In short, if you’re in Canada temporarily or have a valid study or work permit, you might be able to buy a home during the ban on foreign ownership if you meet certain requirements.
For temporary residents, the Canadian government asks for proof that you plan to stay in the country permanently.
Can an international student with a study permit buy a house in Canada?
A student attending an approved program at a Canadian school must meet at least one of the following conditions to be eligible to buy a home:
- Filed all required income tax returns for the last five years.
- Been physically present for at least 244 days in each of the last five years.
- Buying a house that costs no more than $500,000.
- Not bought more than one property.
However, it’s essential to note that $500,000 might not be enough to buy a property in some major cities or provinces where the average home prices are still higher.
Can those with a work permit buy a house in Canada?
Similarly, people with a valid Canadian work permit must meet these conditions:
- Worked for at least three years in the four years before buying, assuming it was a full-time job.
- Filed all required income tax reports for at least three of the previous four years.
- Not bought more than one home.
So, anyone wanting to buy a house as a temporary worker must prove they have at least three years of full-time work experience in the past four years.
Is the foreign buyer market big?
The housing situation is causing concern in Canada due to high prices. To make homes more affordable, the Canada Mortgage and Housing Corp. (CMHC) says we need to build 3.5 million extra homes by 2030, on top of the expected increases.
Some experts doubt if banning non-Canadian buyers will significantly lower property prices because they only make up a small part of the market. In 2020, non-residents made up two to six percent of the market in various provinces.
In 2021, international buyers only made up 1.1% of all home sales in British Columbia.
There are also exceptions to the home-buying rules, allowing the purchase of buildings with four or more residences or in less crowded areas.
What Happens If an Ineligible Person Buys a House in Canada?
If a foreign investor or someone who shouldn’t be buying a house in Canada manages to buy one, they can be fined $10,000. The court might also make them sell the house.