- The Canadian government has eased some restrictions on non-Canadians purchasing residential property in the country.
- Non-Canadians with work permits or work authorization can now purchase one residential property if they have at least 183 days remaining on their permits or authorizations.
- Non-Canadians and foreign businesses can also purchase residential property for development purposes and vacant land zoned for residential or mixed-use.
The Canadian government has recently announced that it will ease some of the restrictions that were imposed on non-Canadians buying residential properties. This decision comes just months after the new rules were implemented.
The Changes in Restrictions
Under the new rules, non-Canadians who are in the country on a work permit or authorized to work in Canada can now purchase residential property. However, they must have at least 183 days remaining on their work permit or work authorization and can only buy one property.
Foreign businesses and non-Canadians can now purchase residential properties if they plan to develop them, as well as vacant land that is zoned for residential or mixed-use purposes.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed by the Parliament in June 2022 and came into effect on January 1, 2023.
The law restricts non-Canadians from buying residential property in Canada for two years. The restrictions were put in place due to rising home prices, and as part of a Liberal promise during the 2021 federal election campaign.
Why the Changes Were Made
The Canadian government has stated that the changes were intended to boost the housing supply and allow newcomers to put down roots in Canada through home ownership. The goal of Canadian Government is to make it easier for businesses to create jobs and build homes by adding to the housing supply in Canadian cities.
Ahmed Hussen, the Minister of Housing and Diversity and Inclusion, announced the changes and emphasized that they strike the right balance between ensuring that housing is used to house those living in Canada, rather than being a speculative investment by foreign investors.
Impact on Underused Housing Tax
The Canada Revenue Agency (CRA) also waived late fees and interest on the Underused Housing Tax (UHT) on the same day the changes were announced. The UHT requires non-resident, non-Canadians to pay one percent of the value of any vacant or underused property in Canada every year.
There are several exemptions to the UHT, including one for seasonal properties. The CRA waived the penalties because it understands the unique challenges that affected owners face in the first year of the tax.
The decision to ease restrictions on non-Canadians buying residential properties is a significant one, especially since the new rules only recently came into effect. The Canadian government’s aim is to boost the housing supply and make it easier for newcomers to put down roots in Canada.
The changes will also allow businesses to create jobs and build homes by adding to the housing supply in Canadian cities. The CRA’s decision to waive penalties on the Underused Housing Tax will also help affected owners during the first year of the tax. Overall, the government hopes that these changes will have a positive impact on the housing market and on the Canadian economy as a whole.