In the last federal election campaign, three of the main political parties made commitments related to limiting or heavily taxing foreign buyers wishing to purchase property in Canada. Their experience with British Columbia’s Foreign Buyer Tax (implemented in August 2016) and the Speculation and Vacancy Tax (SVT) (introduced in the province’s ‘Budget 2018’), suggests such measures have a small and often temporary effect on real estate markets, housing availability and affordability. The effects are largely isolated to large metropolitan markets, with no statistically significant impact in smaller communities.
On June 23, 2022, Parliament passed the Prohibition on the purchase of residential property by non-Canadians Act. Coming into force January 1, 2023, this Act:
- Does not apply to Canadian citizens and permanent residents.
- Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
- Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
- Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
- Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.
It is prudent that you obtain the latest up-to-date information regarding this new government Act. Consult with The TanTeam for more information!