The Canadian federal government recently announced an extension of the Prohibition on the Purchase of Residential Property by the Non-Canadians Act, commonly known as the Foreign Buyer Ban. Originally scheduled to end on January 1st, 2025, the Act will now remain in effect until January 1st, 2027.
The Liberals say the ban, which restricts foreign commercial enterprises and individuals who are not Canadian citizens or permanent residents from acquiring residential properties in Canada, is part of a broader strategy to cool the nation’s overheated housing market and make homeownership more attainable for Canadian citizens.
This two years extension of the ban on forien ownership of Canadian housing is one of the parts of the federal government's economic plan to make housing more affordable for Canadians. The federal government is taking a strong action and working with all orders of government to build more homes faster and put homeownership back within reach for more Canadians (Government of Canada, 2024).
“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class. The government is intent on using all possible tools to make housing more affordable for Canadians across the country.”
- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
Given that housing affordability has not greatly improved since the Act’s implementation more than a year ago, Royal LePage believes that an extension to the foreign buyer ban will not make a material difference on bettering access to housing for Canadians.
“We do not foresee an extension to the foreign buyer ban resulting in a drastic improvement to housing affordability. Non-Canadian property ownership makes up a small percentage of the overall housing market, therefore a ban on such ownership is not likely to improve access to housing in a material way,” said Karen Yolevski, COO, Royal LePage Real Estate Services Ltd. “Given the imbalance between available inventory and buyer demand, the best way to solve Canada’s housing crisis is to significantly increase supply.”
The ban includes several exceptions, such as individuals with temporary work permits, refugee claimants, and international students who meet specific criteria. Violators of the ban could face penalties of up to $10,000 and might be required to sell the property in question.
Quick Facts:
Since 2015, the average annual federal housing investment has more than doubled. In 2023-24, federal investment iun housing is $9 billion higher than it was in 2013-14 (Government of Canada, 2024).
In 2022, the federal government passed the Prohibition on the Purchasing of Residential Property by Non-Canadians Act* to ban foreign investors from buying residential property in Canada and to ensure the housing market remains available to Canadians (Government of Canada, 2024).
More information is available on the government’s website.
If you're looking to navigate these changes or have questions about real estate, don't hesitate to reach out to us at Royal LePage Estate Realty in Toronto, Ontario, where "Helping You Is What We Do™."
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