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Cananda Bans Foreigners From Buying Homes Until 2027

Canada Bans Foreigners From Buying Homes To Improve Affordability

Canada Continues To Ban Foreigners From Buying Homes

Prime Minister Justin Trudeau’s government acted to prohibit foreigners from buying residential properties in 2022, with the measure to expire on Jan. 1, 2025. That expiry date has now been moved to beginning of 2027.

Under the ban, which first came into effect in 2023, foreign commercial enterprises and people who are not Canadian citizens or permanent residents will continue to be prohibited from purchasing residential property in Canada.

The Finance Minister, Chrystia Freeland, issued a statement saying the extension will ensure houses are used for homes for Canadians and families and do not become a speculative financial asset class.

She says the government plans to use all tools possible to make homes more affordable across Canada.

Will The Ban On Foreign Buyers Make Houses More Affordable In Canada?

Experts have questioned whether the foreign buyer ban has a significant effect on housing affordability in Canada, given the relatively small share of the overall housing market owned by non-Canadians. In 2020, for example, the share of the property market owned by non-residents in some provinces measured ranged from two to six per cent.

Canadian citizens and permanent residents are exempt from the ban. Other prospective buyers face various different rules.

International students and foreign workers are allowed to purchase one property, as long as they have lived in Canada for a certain number of years, signalling their intention to become permanent residents.

For workers, that means having worked in Canada for three out of the four years prior to buying a property, while students had to be present in Canada for 244 days each year for the five years prior to buying. International students cannot buy a property for more than $500,000.

Foreign nationals with temporary resident status, refugees, diplomats, consular staff and members of international organisations living in Canada can also buy properties, without further restrictions.

Under the ban, non-Canadian entities, such as overseas corporations and foreign-controlled Canadian entities will be banned from buying property.

The rules only apply to residential properties with three or fewer dwelling units. There are also exceptions for residential properties in less-populated areas. Recreational properties — such as cottages, cabins and other vacation homes — are exempt. 

How Many Homes Are Needed In Canada To Improve Affordability?

Housing has become a major political flashpoint as Canadians deal with a severe affordability crisis. The Canada Mortgage and Housing Corp. (CMHC) says 3.5 million additional homes on top of expected growth need to be built by 2030 to reach affordability.

(Source: CBC News)

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