On January 1, 2023, a foreign buyer ban was implemented, banning non-Canadians from purchasing a home in Canada for the next two years. This ban applies to properties across Canada, including Langley Real Estate.

Check out my previous Blog Post on the Foreign buyer’s ban

This legislation is brand new and has not been put before the courts yet. There are parts of it that are open to interpretation. The information being released is dynamic and is subject to change based on guidance released by the CHMC and court rulings.

Who is subject to the ban:

 The ban applies to non-Canadians which is defined as one that is neither a Canadian citizen, native person, or permanent resident.

If one gives up their permanent residency status while working abroad, one would be a non-Canadian as per the act. If you are a Canadian citizen, you would not be subject to the ban.

The act focuses on the purchaser and not the source of funds. This ban isn’t currently known to ban Canadians and permanent residents from purchasing a home with financial assistance from family. 

Who is exempt

 Exemptions have been made for select groups of people, but the bar for some of those groups to qualify is quite high; in particular, it is challenging for students and temporary residents to qualify. For a temporary student to be exempt, they must have filed tax returns for the past five years while also residing in Canada for 244 calendar days every year for the past five years. Workers must have worked full-time for 3 of the past four years and filed tax returns in Canada for the past 3 of 4 years. 

Full Exemption list as provided by the CMHC

Temporary residents studying in Canada, if they:

• are enrolled in a program of authorized study at a designated learning institution as defined in the Immigration and Refugee Protection Regulations
• have filed income tax returns for each of the 5 taxation years preceding the year in which the purchase was made
• have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made
• have not previously purchased a residential property in Canada while the prohibition is in effect
• purchase a property for a price not exceeding $500,00

Temporary residents working in Canada if they:

• hold a valid work permit or are authorized to work in Canada
• have worked full-time in Canada for at least three years within the four years preceding the year in which the purchase was made
• have filed income tax returns for 3 of the four taxation years preceding the year in which the purchase was made
• have not previously purchased a residential property in Canada while the prohibition is in effect

Refugees, if they:

• have been given refugee protection or are a protected person under the Immigration and Refugee Protection Act, 2001

Refugee claimants and individuals fleeing international crises, if they:

• have made a claim for refugee protection in accordance with the Immigration and Refugee Protection Act, if that claim has been found eligible and referred to the Refugee Protection Division; or
• have received temporary resident status in accordance with the Immigration and Refugee Protection Act based on humanitarian public policy considerations to provide a haven to those fleeing conflict

Accredited members of foreign missions in Canada, if they:

• hold a passport that has a valid diplomatic, consular, official, or special representative acceptance issued by the Chief of Protocol of Canada

Non-Canadian spouses and common-law partners, if they:

• purchase residential property in Canada with their spouse or common-law partner who is a Canadian citizen, a person registered under the Indian Act, a permanent resident or a non-Canadian for whom the prohibition does not apply.

If you are found assisting a foreign resident in purchasing a home:

You could be found guilty by way of summary conviction of a criminal offense and a fine of up to $10,000.

How to determine if your property is subject to the ban

The act discusses residential property. If one is to purchase a property, one must look at the act to see if the home qualifies as residential.

The CMHC defines a residential purchase as

Buildings of up to 3 dwelling units and parts of buildings, like semi-detached houses or condominium units.

The Regulations clarify that the prohibition applies to

• residential property located in a census metropolitan area or a census agglomeration, as outlined in greater detail below.
• vacant land that does not contain any habitable dwelling, that is zoned for residential use or mixed-use, and that is located within a census metropolitan area or a census agglomeration.

For more information about the ban, read CMHC’s full article at:

https://www.cmhc-schl.gc.ca/en/media-newsroom/notices/2022/ensuring-housing-owned-canadians

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Curious about the foreign buyers’ ban? Check out: https://lizpenner.com/buying-in-the-fraser-valley/Langley Real Estate, Langley Realtor, Langley Commercial Realtor, Commercial Real Estate