Federal government eases some restrictions on non-Canadians purchasing property
Changes intended to boost housing supply, minister says
Non-Canadians in the country on a work permit or who are authorized to work in Canada can now purchase residential property. They must have at least 183 days or more remaining on their work permit or work authorization and must purchase only one property to be eligible.
Non-Canadians and foreign businesses can now also purchase residential property if they intend to develop it, and can purchase vacant land zoned for residential or mixed use for any purpose.
Parliament passed the law restricting non-Canadians from purchasing property, the Prohibition on the Purchase of Residential Property by Non-Canadians Act, in June 2022. The law went into force at the start of this year, and prevents non-Canadians from buying residential property in Canada for two years. The restrictions were part of a Liberal promise made during the 2021 federal election campaign amid rising home prices.
Ahmed Hussen, the minister of housing and diversity and inclusion, announced the changes Monday. A news release from the Canada Mortgage and Housing Corporation (CMHC) said the changes went into effect immediately.
"These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities," Hussen said in the news release.
"These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors."
CRA waives late penalty on new housing tax
The changes came on the same day the Canada Revenue Agency (CRA) waived late fees and interest on the Underused Housing Tax (UHT), which also came into effect on Jan. 1. The tax requires non-resident, non-Canadians to pay one per cent of the value of any vacant or underused property in Canada yearly. There are several exemptions to the UHT, including an exception for seasonal properties.
The CRA said in a news release it was waiving the penalties because it "understands that there are unique challenges for affected owners in the first year" of the tax.
Those affected by the tax will now have until Oct. 31 to file UHT returns and payments without penalty.
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Office of the Minister of Housing and Diversity and Inclusion
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Today, the Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion, announced amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act’s accompanying Regulations.
The Act was passed by Parliament on June 23, 2022, and the Act and Regulations came into force on January 1, 2023, as part of the Government of Canada’s strategy to make housing more affordable for Canadians. The accompanying regulations were developed for the Act to set out specific exceptions, definitions, and clarifications necessary to implement the prohibition.
To enhance the flexibility of newcomers and businesses looking to add to Canada's housing supply, the Government of Canada is making amendments to the Regulations, to expand exceptions to allow Non-Canadians to purchase a residential property in certain circumstances. These amendments will further support individuals and families seeking to build a life in Canada by pursuing home ownership in their communities sooner and address housing supply issues. These amendments come into force on March 27, 2023.
The following amendments are being announced by the Minister of Housing and Diversity and Inclusion:
Enable more work permit holders to purchase a home to live in while working in Canada.
The amendments will allow those who hold a work permit or are authorized to work in Canada under the Immigration and Refugee Protection Regulations to purchase residential property. Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at time of purchase, and they have not purchased more than one residential property. The current provisions on tax filings and previous work experience in Canada are being repealed.
Repealing existing provision so the prohibition doesn’t apply to vacant land.
We are repealing section 3(2) of the regulations, so the prohibition does not apply to all lands zoned for residential and mixed use. Vacant land zoned for residential and mixed use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development.
Exception for development purposes.
This exception allows non-Canadians to purchase residential property for the purpose of development. The amendments also extend the exception currently applicable to publicly traded corporations under the Act, to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian.
Increasing the corporation foreign control threshold from 3% to 10%.
For the purposes of the prohibition, with regards to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian, the control threshold has increased from 3% to 10%. This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.
Quote:
“To provide greater flexibility to newcomers and businesses seeking to contribute to Canada, the Government of Canada is making important amendments to the Act’s Regulations. These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities. These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”
Additional information:
Access more information on the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
Access more information on the Amendments to the Act’s Regulations on the Frequently Asked Questions page of the CMHC website.
For information on this news release:
Brittany Hendrych
Office of the Minister of Housing and Diversity and Inclusion
Brittany-Anne.Hendrych@infc.gc.ca
Media Relations
Canada Mortgage and Housing Corporation
media@cmhc-schl.gc.ca
Romy Bowers was appointed President and Chief Executive Officer of CMHC in April 2021. She leads a team of housing experts who share a single goal: that “By 2030, everyone in Canada will have a home that they can afford and that meets their needs.” Romy believes CMHC can be a catalyst for solving housing affordability challenges and a leader in building a housing system that is equitable and free of systemic racism.
Romy joined CMHC in 2015 as the company’s Chief Risk Officer. She has also served as CMHC’s Chief Commercial Officer and most recently was Senior Vice-President of Client Solutions, where she led a team that brings together the expertise of CMHC’s commercial and assisted housing businesses to better understand the housing needs of Canadians and develop new client-focused products and services to meet those needs.
Prior to joining CMHC, Romy had a diverse career in the Canadian banking industry, including 12 years with the Bank of Montreal, where she gained extensive experience in treasury operations and risk management.
Romy holds an M.A. in Business Administration (Finance) from the University of Toronto and an M.A. in Arts from McGill University.
Expertise
National Housing Strategy, Housing Affordability, Housing Finance, Housing
Markets and Indicators, Client-Focused Solutions
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HDI.Minister-Ministre.LDI@infc.gc.ca, hursh.jaswal@infc.gc.ca, Mario.salazar@infc.gc.ca, jordan.wilson@infc.gc.ca, rbowers@cmhc-schl.gc.ca,
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