Prohibition on the Purchase of Residential Property by Non-Canadians Act has come into effect as of January 1, 2023 by the Federal Government. The Act prevents non-Canadian individuals and non-Canadian corporations from purchasing residential property in Canada for two years.
Definitions:
- Non-Canadian: An individual who is not a Canadian citizen, permanent resident, or a person registered as an Indian under the Indian Act. This also includes corporations that are not incorporated under the laws of Canada or a province within Canada.
- Residential property: A detached house, semi-detached house, row house unit, townhouses, or a residential condominium unit located within a metropolitan area This Act specifically refers to residential properties. Recreational properties are not included. Exemptions:
Although the legislation primarily targets non-Canadians, there are some exceptions:
1. Temporary residents such as students and workers, foreign workers;
2. Refugees;
3. Individuals purchasing a residential property with an eligible spouse or common-law partner are exempt from the Act.
Penalties:
- Knowingly helping a non-Canadian buy a residential property could face fines up to $10,000. Penalties will apply to anyone who facilitates or participates in the prohibited real estate transaction. Purchases made prior to January 1, 2023 will not be impacted.
- If agents are found selling a prohibited property to a non-Canadian or a non- Canadian Corporation, the non-Canadian owners will be subjected to sell the property.
More details on the Regulations governing the Act will addressed in the coming months.
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