Foreign Homebuyer Ban Changes

The Canadian government has announced amendments to the regulations surrounding the country’s foreign homebuyer ban, which came into effect on January 1, 2023. The Prohibition on the Purchase of Residential Property by Non-Canadians Act was introduced to improve affordability for Canadians looking to buy a home but has caused confusion and unintended consequences for the real estate industry. The changes expand exceptions to allow non-Canadians to purchase residential properties under certain circumstances and address the concerns raised over the last few months. The amendments include exceptions for development purposes, an extension of the exception for publicly traded corporations, and an increase in the corporation foreign control threshold. Additionally, the prohibition no longer applies to vacant land, and more work permit holders are eligible to purchase a home. The impact of the foreign homebuyer ban has been negligible in the resale housing market, but developers have pulled the plug on developments, particularly in the condo market. The amendments took effect immediately on March 27. The CEO of the British Columbia Real Estate Association expressed concern over what he described as a hasty decision-making process and called for the government to engage with the industry to ensure policies are properly vetted and address the country’s complex housing issues.