International students, temporary residents, and refugees will be given limited exceptions to Canada’s foreign buyer restriction, the Canada Mortgage and Housing Corporation (CMHC) stated on Wednesday.
All non-Canadians are prohibited from purchasing residential real estate in Canada for a period of two years beginning January 1, 2023. This restriction is intended to assist calm the housing market and lower prices.
The law contains a $10,000 penalties for non-Canadian buyers who transgress the restriction as well as anyone who knowingly aids them. The price paid to buy the property will be the only amount returned to the buyer by the court if they decide to order the sale of the property.
Residential properties with three or fewer residences, as well as individual buildings like semi-detached houses or condo units, are particularly covered by the restriction. Vacant land in a census metropolitan area that may not have any livable homes on it but is zoned for residential or mixed-use is also included in this.
The term “non-Canadian” refers to someone who is not a citizen, permanent resident, person registered under the Indian Act, or a privately held, non-listed corporation that is controlled by a non-Canadian and has its headquarters in Canada.
Numerous exceptions to the prohibition are provided by the regulations, though frequently under very strict conditions. Temporary residents studying in Canada, for instance, may qualify for an exemption, but only if they have submitted income tax returns for the previous five years, have been present in the country for 244 days or more each of the five years prior, and have not previously bought a home in the country while the ban was in place. Additionally, they are restricted from spending more than $500,000 on real estate, which is a lot in Canada.
In order to qualify for exemption, temporary residents must have a valid work permit or permission, have worked in Canada full-time and submitted income taxes for at least three of the four years prior, and, like students, have not previously bought a home in the country while the prohibition is in place.
Exemptions apply to both refugees and those who have been granted refugee protection, as well as to those who have filed an official claim for refugee protection and those who have been granted temporary resident status.
Additionally, the foreign buyer restriction does not apply when a property is acquired as a result of a secured creditor exercising a security interest or secured right, or when a property is acquired through a gift, divorce, separation, or death.