Ottawa Amends Foreign Home Buyers Ban to Increase Exceptions

A sold sign outside a home in Vancouver, in a file photo. The Canadian Press/Jonathan Hayward

The federal government has announced several amendments to its ban on foreign investors purchasing non-recreational residential property in Canada that will increase exceptions to the regulations, such as allowing non-Canadians to purchase residential property for development purposes.

The announcement, made by Housing, Diversity, and Inclusion Minister Ahmed Hussen on March 27, amends regulations brought into force by the government on Jan. 1 through the Prohibition on the Purchase of Residential Property by Non-Canadians Act.

The prohibition was intended to bring down sky-high real estate prices for local residents, especially those living in major cities, and to prevent houses from being used “as financial assets for foreign investors.”

However, the amendments will bring in new exceptions to the ban, such as allowing foreigners holding a work permit to purchase Canadian residential property.

A Canadian Mortgage and Housing Corporation press release says foreign work-permit holders will be eligible for the exception if they have “183 days or more of validity remaining on their work permit or work authorization at time of purchase, and they have not purchased more than one residential property.”

Another amendment to the ban allows foreign investors to purchase residential real estate if they declare that it’s “for the purpose of development.”

The government is also repealing a section of the regulations so that the prohibition doesn’t apply to “vacant land zoned for residential and mixed use,” which it says can now be purchased by non-Canadian buyers and “used for any purpose ... including residential development.”

The last amendment raises the control threshold for foreign, privately held corporations from 3 percent to 10 percent.

Foreign Real Estate Investing

Hussen said in the announcement that the newly eased regulations are intended to “provide greater flexibility to newcomers and businesses seeking to contribute to Canada.”

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” he said. “These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”

The prohibition on foreigners buying Canadian residential real estate was a Liberal campaign promise during the 2021 federal election.

The party’s platform said at the time that foreign real estate investments in Canada was leading to an increase in “underused and vacant housing, rampant speculation, and skyrocketing prices.”

“Homes are for people, not investors,” it said.

After one month of the new prohibition being in place, Statistics Canada found that average home prices across Canada had cooled slightly, but also that rising borrowing prices were impacting nationwide housing demand.

Bryan Jung contributed to this report.