Federal government introduces amendments for foreigners willing to buy Canadian property

Just a few months after the new rule took effect, the government is easing certain restrictions on foreigners buying residential property in Canada.

From now on, non-Canadians with a work permit or work authorization can buy residential property, if they have at least 183 days remaining on their work permitting document. They also can purchase only one real estate unit.

In addition to it, non-Canadians and foreign businesses can buy residential property if they plan to develop it, and can purchase vacant land assigned for residential or mixed use.

In June 2022, the Parliament passed a law banning property purchases by non-Canadians. The law took effect at the beginning of 2023. It prevents non-Canadians from buying residential property in Canada for two years. Such restrictions were included in a Liberal government promise made during the 2021 federal election race amid growing housing prices.

On Monday, Ahmed Hussen, the minister of housing and diversity and inclusion, introduced the changes to the law. According to the Canadian Mortgage and Housing Corporation (CMHC), the changes tool force immediately.

“These amendments will let newcomers put down roots in Canada with the help of home ownership, while businesses will be able to add jobs and build properties increasing the real estate supply,” – Hussen noted.

“Such changes bring the right balance to ensuring that housing is used for living, and not for speculative investments by foreign investors.”

The changes took effect on the same day the Canada Revenue Agency (CRA) decided to waive late fees and interest on the Underused Housing Tax (UHT), which took force this year as well. The tax requires non-resident, non-Canadians to pay 1% of the value of a vacant or underused property annually. However, there are certain exemptions, including seasonal real estate units.

According to the CRA, the reason for such a change is that it “understands that there are unique challenges owners face during the first year” of the tax.

Owners affected by the tax will have time until October 31 to file UHT returns and payments without any penalties.