On March 27, 2023, the federal government announced amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act’s (the Act) accompanying Regulations, effective March 27, 2023. The Act was passed in June 2022 and the regulations came into force January 1, 2023.
Here’s what you need to know about the amendments to the Foreign Buyers Ban.
Enable more work permit holders to purchase a home to live in while working in Canada.
The amendments allow those who hold a work permit or are authorized to work in Canada under the Immigration and Refugee Protection Regulations to purchase residential property. Work permit holders are eligible 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. The current provisions on tax filings and previous work experience in Canada are being repealed.
Repealing existing provision so the prohibition doesn’t apply to vacant land.
Repealing section 3(2) of the regulations, so the prohibition does not apply to all lands zoned for residential and mixed use. Vacant land zoned for residential and mixed use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development.
Exception for development purposes.
This exception allows non-Canadians to purchase residential property for the purpose of development. The amendments also extend the exception currently applicable to publicly traded corporations under the Act, to publicly traded entities formed under the laws of Canada or a province, and controlled by a non-Canadian.
Increasing the corporation foreign control threshold from 3 per cent to 10 per cent.
For the purposes of the Prohibition, with regards to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian, the control threshold has increased from 3 per cent to 10 per cent. This aligns with the Underused Housing Tax Act’s definition of ‘specified Canadian Corporation’.
While the BC Real Estate Association (BCREA) welcomes these amendments because they provide greater flexibility to newcomers and businesses seeking to contribute to Canada, we remain opposed to the legislation’s highly political and largely non-evidential assertion that foreign ownership plays a significant role in Canadian housing attainability.
The federal government’s need to amend this policy demonstrates its overly hasty policy-making process. The negative unintended consequences that necessitated the amendments could have been mitigated with proactive, fulsome sectoral consultation. The negative fallout from this legislation once again highlights a concerning trend at all levels of government to implement policy affecting major economic sectors without adequate advance sectoral consultation.
BCREA is committed to continuing our advocacy efforts calling for the establishment of a Permanent Housing Roundtable to bring together all stakeholders in the housing sphere and help address its challenges with an inclusive, holistic and innovative approach.
(This article is courtesy of BCrea)
Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.
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