Prohibition on the Purchase of Residential Property by Non-Canadians (Foreign Buyers Ban)

Last week, the federal government released the supporting regulations for the 'Prohibition on the Purchase of Residential Property by Non-Canadians Act' (Foreign Buyers Ban) which includes definitions, exceptions, and enforcement elements to help individuals understand and comply with the law.   

The measures were part of Bill C-19 – the Budget Implementation Act – which received royal assent on June 23, 2022 as the federal government looked to cool the hot housing market. 

Read more from Finance Minister Chrystia Freeland : Bill C-19 - The Budget Implementation Act (

Parliament passed the 'Prohibition on the Purchase of Residential Property by Non-Canadians Act' which has been in force since Sunday, January 1, 2023 with the following regulations:

  • Does not apply to Canadian citizens or permanent residents.
  • Applies to Non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
  • Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
  • Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
  • Establishes penalties for non-compliance applicable to Non-Canadians, as well as any person or entity knowingly assisting a Non-Canadian in violating the prohibition.

 The 'Canadian Real Estate Association (CREA)' is extremely disappointed by the government's decision to move forward with this legislation and the rollout of its regulations. Parliamentarians that supported the introduction of this measure need to recognize it will have a detrimental impact on Canada’s reputation, labour market, economy and severely hinder our ability to attract global talent. Our CEO Michael Bourque recently spoke at the Senate Committee on National Finance where he stated why CREA believes this piece of legislation does not address the core of Canada’s housing crisis.

The regulations clarify that an order requiring the Residential Property be sold may be sought provided certain conditions are met, namely the Non-Canadian is the owner at the time the order is made and notice requirements have been met.

The regulations broadly define the term purchase to include the direct or indirect acquisition of a right or interest in Residential Property. The regulations then specifically exclude, among other things, acquisitions of interests resulting from transitional or life events such as death, divorce, separation, or a gift.

The term Non-Canadian, as it relates to corporations and other entities, has been defined as:
  • an entity not formed pursuant to the laws of Canada or one of its provinces; and
  • an entity formed under Canada’s laws that has direct or indirect ownership by a Non-Canadian of 3% or more of the value of the entity’s equity or voting rights.

Excluded residential properties
Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from this prohibition.

Exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. For further details, please consult the regulations and/or ensure the buyer who may fall into one of these exception groups seeks legal advice on their eligibility.

Additional guidance    
Further to the information that has been provided in the regulations, Canada Mortgage and Housing Corporation (CMHC) has released additional information and FAQs with respect to the interpretation of the Act and regulations.

Posted by Stephen Foster on
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