The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) came into force January 1, 2023. In very general terms, the Act creates a temporary ban (it is set to expire December 31, 2024) prohibiting non-Canadians from directly or indirectly purchasing residential property in Canada for a period of two years.
The ban applies to residential property including detached homes or similar buildings of one to three dwelling units as well as parts of buildings such as semi-detached houses, strata units, or other similar premises.
Under the Act, ‘non-Canadian’ includes individuals who are neither a Canadian citizen nor a permanent resident of Canada; corporations incorporated outside of Canada or “controlled” by foreign corporations or individuals who are not permanent residents of Canada or Canadian citizens; and others (to be detailed in forthcoming regulations under the Act). However, the Act does include certain exemptions for some foreign buyers, such as refugees or individuals who purchase residential property with their spouse or common-law partner (provided the spouse or common-law partner is eligible to purchase residential property).
Most importantly, the Act establishes serious penalties for non-compliance applicable to ‘non-Canadians’ as well as any person or entity knowingly assisting a ‘non-Canadian’ in contravening the prohibition. These fines can be up to $10,000 per offender. Further, the Act provides that a contravention of the prohibition could result in a court-ordered sale of the residential property.
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This article is intended for information purposes only and should not be taken as the provision of legal advice. Grace C. Cleveland is a lawyer with the law firm of Cleveland Doan LLP and can be reached at (604)536-5002 or firstname.lastname@example.org.