Canada's Ban on Foreign Buyers of Homes Goes into Effect

A two-year ban on the purchase of residential property in Canada by non-Canadian individuals and corporations—passed by the Canadian government in June 2022, before a slowdown in homes sales deepened—went into effect on Jan. 1.

The ban, put forward ostensibly to address housing affordability issues prices spiraled—and then narrowed by a series of exemptions the government has expanded in recent months—is not expected to have much impact on housing prices or sales in current market conditions after a series of rate hikes by the Canada’s central bank.

Regulations issued by the government have exempted from the ban buildings containing more than three dwelling units and recreational properties including cottages, cabins and other vacation homes.

The ban also doesn’t cover properties worth less than $366K or those that located in areas that have a population of less than $10K.

The government also exempted workers who have worked and filed tax returns in Canada for at least three of the four years prior to purchasing a property; members of international organizations living in Canada; international students who have spent most of the past five years in Canada; and foreign nationals with temporary resident status, including refugees and people seeking asylum.

Foreign buyers who are not exempted and try to skirt the ban are subject to a fine of up to $10,000.

“Homes should not be commodities,” said Ahmed Hussen, minister of Housing and Diversity and Inclusion, said in a statement announcing the ban is now in effect.

“Homes are meant to be lived in, a place where families can lay down roots, create memories and build a life together. Through this legislation, we’re taking action to ensure that housing is owned by Canadians for the benefit of everyone who lives in this country. We will continue to do whatever we can to ensure that all residents of this country have a home that is affordable and that meets their needs,” Hussen said.

Prime Minister Justin Trudeau touted the ban in his last election campaign as means of reducing competition for housing in an environment of soaring home prices.

In British Columbia, where the Vancouver market has had the highest home prices in Canada, real estate experts have indicated they expect the ban to have little effect because foreign buyers already have dwindled due to an existing 20% foreign-buyers tax and rising interest rates.