Foreign buyer ban extended to January 1, 2027
At a glance (3 minute read)
- The federal government extended the ban on foreign ownership of housing to January 1, 2027, aiming to address affordability concerns.
- Work permit holders, temporary residents meeting conditions, and non-Canadians purchasing with eligible partners exempted.
- Canadian Real Estate Association is questioning the necessity of the extension, and urges exemptions and tailored provincial input.
The federal government will extend the existing ban on foreign ownership of Canadian housing by an additional two years.
The ban, which is currently set to expire on January 1, 2025, will be extended to January 1, 2027.
“For years, foreign money has been coming into Canada to buy up residential real estate, increasing housing affordability concerns in cities across the country,” said Chrystia Freeland, deputy prime minister and minister of finance in a news release on February 4.
“Foreign ownership has also fueled worries about Canadians being priced out of housing markets in cities and towns across the country,” Freeland said.
Who can’t buy housing
In 2022, the federal government passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act banning foreign investors from buying residential property in Canada. The act came into force on January 1, 2023.
Foreign commercial enterprises and individuals who aren’t Canadian citizens or permanent residents will continue to be prohibited from buying residential property in Canada.
Exceptions
There are exceptions for:
- those with work permits and those buying land for development;
- temporary residents who satisfy prescribed conditions; and
- non-Canadians who purchase residential property with their spouse or common-law partner if the spouse or common law-partner is a Canadian citizen, person registered as an Indian under the Indian Act, or permanent resident or a temporary resident or protected person.
By extending the foreign buyer ban, the government is ensuring houses are used as homes for Canadian families to live in and do not become a speculative financial asset class, according to Freeland.
Canadian Real Estate Association (CREA) response
CREA believes the federal government’s intention to extend the foreign buyer ban is baseless and unnecessary.
“The newly announced two-year extension is completely unnecessary, considering there is no analysis, evidence or data from Statistics Canada, CMHC, or Finance Canada, to support the government’s intended impact on housing affordability in Canada,” said Janice Myers, CREA’s CEO.
“If the government decides to move forward with this baseless extension, CREA urges it to consider recommendations including:
- exempting pre-construction financing;
- defining and exempting recreational property;
- including CUSMA exemptions; and
- giving provinces input to tailor to their housing market requirements.
Since the foreign buyer ban was announced in 2022, CREA has actively advocated for the government to reconsider the legislation and the rollout of the regulations.
CREA has also questioned the whether the ban has made housing more affordable in Canada.
In September 2022, CREA submitted a written consultation to Canada Mortgage and Housing Corporation (CMHC), highlighting negative unintended consequences of the legislation on the Canadian housing market and economy.
CREA believes the federal government should instead focus its efforts on policies that support the construction of more housing across the entire continuum.
If you have questions about the foreign buyer ban, contact Harriet Permut, director of government relations at hpermut@rebgv.org.
Read the federal government news release on the foreign buy ban extension.
Read the Prohibition on the Purchase of Residential Property by Non-Canadians Act and the amendments.