Prohibition on The Purchase of Residential Property by Non-Can - Fifth Avenue REM mediaiqdigital tracking pixel
Market Intelligence, Real Estate News, Your Next Home | February 16, 2023

New Law Restricts Non-Canadians from Buying Canadian Homes

The recent Prohibition on the Purchase of Residential Property by Non-Canadians Act has sparked both praise and criticism. This law bans non-Canadians from buying residential property in Canada, with some exceptions.

Goals of the Act

The main goal is to protect the Canadian housing market from foreign speculation, blamed for rising home prices. The act also aims to ensure Canadians can access affordable housing and prevent foreign investors from exploiting the market.

Arguments For the Act

Proponents believe the act will stabilize the housing market and prevent price hikes from foreign investors. They also argue it will protect Canadian citizens’ rights and ensure they are not priced out of the market.

Arguments Against the Act

Opponents argue the act could negatively impact the economy by discouraging foreign investment. They also fear it could reduce the number of available properties as investors might turn to other countries.

Key Takeaways

Non-Canadians are now prohibited from purchasing residential property in Canada. This ban includes condominiums, single-family homes, and other types of residential dwellings. The law applies to all non-Canadians, including permanent residents, foreign nationals, and those with temporary status.

Impact on Rentals and Investments

The law also bans non-Canadians from entering into lease or rental agreements for residential property in Canada. This could significantly impact the rental market. Additionally, non-Canadians cannot acquire interests in residential property, directly or indirectly. This means they cannot buy shares or interests in companies that own residential property in Canada.


The Prohibition on the Purchase of Residential Property by Non-Canadians Act is a significant piece of legislation. It aims to protect the Canadian housing market and ensure Canadians can buy homes without foreign competition. Foreign investors should take this law seriously if they plan to invest in Canadian residential property.

Defining the Parameters of the Act

The Act and Regulations define a “non-Canadian” as:
The Act and Regulations define “residential property” as any real property or immovable located within a census agglomeration or census metropolitan area, including:
The Act defines “purchase” as acquiring a legal or equitable interest in a residential property, with exceptions for:



The Act and Regulations specify that the prohibition on purchasing residential property does not apply to refugees, temporary residents, protected persons under the Immigration and Refugee Protection Act, foreign diplomats, and other specified groups.

Non-Canadians who assumed liability for a residential property under an agreement of purchase and sale before January 1, 2023, are also exempt from the prohibition.


Non-Canadians who violate the prohibition face fines of up to $10,000. Anyone who knowingly counsels, induces, aids, or abets them, or attempts to do so, will also be liable.

Professionals involved in property transactions, such as lawyers, brokers, developers, and realtors, must verify buyers’ status to avoid liability under the Act.

If a corporation or entity commits an offense, responsible individuals such as officers, directors, agents, senior officials, or managers will also be liable.

The Act punishes violations but does not void property sales. Contractual obligations related to the sale remain enforceable. However, if a non-Canadian violates the Act, the superior court of the province where the property is located may order its sale as prescribed by the Act and Regulations.

Looking Ahead

In addition to the federal ban, provincial and municipal taxes on vacant homes or land speculation took effect on January 1, 2022. Federal tax changes for residential property flipping began on January 1, 2023. Ontario implements the Non-Resident Speculation Tax, which imposes a 25% tax on non-resident purchases of residential homes under the Land Transfer Tax Act. The effectiveness of these measures remains to be seen.

Sources: Cassels, Goverment of Canada

Share this post

Related posts

View all news