On March 27, 2023, the Honourable Ahmed Hussen, Minister of Housing and Diversity and Inclusion, announced amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act’s accompanying Regulations. These amendments are being introduced to make the purchase of housing more affordable for Canadians and enhance the flexibility of newcomers and businesses looking to contribute to Canada.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed by Parliament on June 23, 2022, and came into force on January 1, 2023. The accompanying regulations were developed for the Act to set out specific exceptions, definitions, and clarifications necessary to implement the prohibition.
The amendments announced by the Minister will expand exceptions to allow non-Canadians to purchase residential properties in certain circumstances. These changes are designed to support individuals and families seeking to build a life in Canada by pursuing home ownership in their communities sooner and addressing housing supply issues.
One of the amendments will enable more work permit holders to purchase a home to live in while working in Canada. Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at the time of purchase and have not purchased more than one residential property. The current provisions on tax filings and previous work experience in Canada are being repealed.
Another amendment will repeal the existing provision so that the prohibition doesn’t apply to vacant land. Vacant land zoned for residential and mixed-use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development.
The amendments also include an exception for development purposes, allowing non-Canadians to purchase residential property for the purpose of development. The exception currently applicable to publicly traded corporations under the Act has been extended to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian.
Lastly, the control threshold for privately held corporations or entities formed under the laws of Canada or a province and controlled by a non-Canadian has increased from 3% to 10%. This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.
In the words of the Hon. Ahmed Hussen, “These amendments will allow newcomers to put down roots in Canada through homeownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities. These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”
The Canadian Mortgage and Housing Corporation (CMHC) website provides additional information on the Prohibition of the Purchase of Residential Property by Non-Canadians Act and the amendments to the Act’s Regulations. Here is the link: https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2023/amendments-prohibition-purchase-residential-property-non-canadians-regulations
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