The Government of Canada has announced a two-year extension to an existing ban on foreign ownership of Canadian housing. The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the Act) was set to expire at the end of 2024, it will now be extended to January 1, 2027.
The government announced the extension on February 4, 2024. The Deputy Prime Minister and Minister of Finance said the step was taken to address housing affordability concerns in Canada. Under the ban, foreign commercial enterprises and people who are not Canadian citizens or permanent residents are prohibited from purchasing residential property in Canada.
The Act and its related regulations came into effect on January 1, 2023. Bennett Jones looked at the key aspects of these policies in our previous blog, New Rules for Foreign Home Buyers in Canada Now In Force: Here's What You Need to Know.
As we have written, this federal legislation is rather unique and covers an area that has typically (and constitutionally) been the domain of the provinces. Buyers who may have an upstream ownership structure that could offend the prohibition under the Act should proceed with caution and under the advice of counsel to determine whether they are subject to these new restrictions imposed. Similarly, professional advisors and others involved in the spectrum of services provided to buyers of real property will need to bear the prohibition in mind to ensure that they too are not exposed to the consequences imposed by the legislation.
If you have any questions about the rules for foreign home buyers in Canada, please reach out to the authors of this blog or a member of our Commercial Real Estate group.