Prohibition on the Purchase of Residential Property by Non-Canadians Act
Author: Léa Chebli, Lawyer, real estate broker
What is the Prohibition on the Purchase of Residential Property by Non-Canadians Act?
The Act came into force from January 1, 2023, to January 1, 2027, and it prohibits non-Canadians from the purchase of residential real estate in Canada (hereafter the “Act”).
This Act is part of a series of measures adopted by the Canadian government in 2022, to contain the extremely rapid growth in property prices between 2020 and 2022 in most of the country. For information purposes, the average price of a property, in all categories in Quebec, had risen by 60% between February 2020 and May 2022[1].
Scope and Duration of the Act
The Act applies only to residential buildings, which is defined as: single-family homes, condominiums (condos) and multi-units (duplexes and triplexes only). The Act, initially in force for a period of two years was extended in February 2024 for an additional two years and will be in force until January 1st 2027. However, there is a possibility that it may be renewed.
Principle
Anyone who is not a Canadian citizen or does not have permanent residency cannot buy residential buildings in Canada while this Act is in force. It does, however, provide for exceptions that allow otherwise ineligible people to purchase real estate in Canada.
The Main exceptions to the Act allowing non-Canadians to purchase a residential real estate:
a) Student: A non-Canadian student enrolled in a recognized Canadian educational program, who has been present in Canada, at least 244 days per year for the 5 years preceding the purchase and purchasing a single residential property with a value less than 500,000 $.
b) Spouse: The spouse or common-law partner of a Canadian citizen or permanent resident can purchase a residential real estate if it is with their spouse or common-law partner. In order to qualify as a “de facto spouse” under the Act, the spouses must have been in a conjugal relationship for at least 1 year prior to their purchase.
c) Canadian workers: Non-Canadians holding a work permit valid in Canada for another 183 days (i.e., 6 months) may purchase a single residential property. It is interesting to note that in the first version of the Act’s regulations, the work permit holder had to have worked full time for 3 years in Canada in the 4 years prior to the purchase to be eligible for such a purchase. As such, many non-Canadian workers are still unaware that they can now buy a residential property in Canada even if they’ve worked here for less than 3 years.
This article contains general information and should not replace legal advice from a lawyer or a notary that would take into account your specific situation.