Government of Canada Introduces Amendments to Foreign Buyer Ban

On Monday, the Government of Canada announced amendments to the foreign buyer ban, officially called the Prohibition on the Purchase of Residential Property by Non-Canadians Act, to expand exceptions to the regulations, easing concerns for developers nationwide.

Amendments Overview:

1. Foreign Control Threshold Raised to 10%: The amendment increases the maximum non-Canadian ownership allowed in real estate investment trusts (REITs) subject to the ban from 3% to 10%.
2. Purchasing for Development Allowed: Non-Canadians can now buy residential property for development purposes, expanding the previous exception, which only applied to publicly-traded corporations.
3. Vacant Land Exemption: The ban no longer applies to vacant land zoned for residential or mixed-use with residential, allowing non-Canadians to purchase and utilize it for any purpose.
4. Work Permit Holders Exempt: Those holding a valid work permit in Canada can now buy residential property, provided they have at least 183 days remaining on their permit and have not already purchased more than one property.

Government Stance:

Minister of Housing and Diversity and Inclusion Ahmed Hussen emphasized that these changes aim to provide flexibility for newcomers and businesses to contribute to Canada’s housing market while ensuring housing is primarily for residents rather than speculative investments by foreigners.

Industry Response:

While the ban intends to address housing affordability, many in the industry doubt its effectiveness. However, developers may find relief with these amendments.