Update on Purchase Prohibition of Residential Property by Non-Canadians Act

Canadian Legislation Bans Foreigners From Buying Homes

Update: Prohibition on the Purchase of Residential Property by Non-Canadians Act

On June 23rd, 2022, the Parliament of Canada passed legislation called “The Prohibition on the Purchase of Residential Property by Non-Canadians Act”, which will come into force on January 1st, 2023. 

The Government is now working to finalize certain details in regulations under the Act. These details include selected definitions, exceptions and enforcement elements. Additional revisions may still affect this new actm but stakeholders are advised to check early if the Act could apply to them and the implications. 


The Act prohibits non-Canadians from purchasing, directly or indirectly, residential property in Canada for a period of two years. Canadian Citizens and Permanent Residents are not subject to the prohibition. 


The act defines residential property to include any real property or immovable property of not more than three dwelling units. This definition includes detached houses or similar buildings, as well as parts of buildings, such as semi-detached houses, condominium units or other similar premises. Larger multi-unit properties of four or more units are not subject to the prohibition.  


There are certain exceptions to the act, but using corporations or other entities to purchase residential property is not accepted as an exception. The act establishes that the prohibition applies to corporations incorporated in Canada, where the corporation is privately held (i.e. not listed on a stock in Canada) and is controlled by a non-Canadian. 


Exceptions:

A) Certain Groups of People:

  1. Temporary Residents

* International Students (not quite clear yet, but might be limited to up to $500,000, certain designated learning institutions and other requirements)

* Foreign Nationals with Work Permits (not quite clear yet, but min. requirements could be a minimum continuous work period in Canada for 3 years and has filed income tax returns accordingly; holds a valid work permit)


  1. Non-Canadians purchasing residential property together with their spouse or common law partner where the latter is a Canadian citizen or permanent resident

  1. Refugees and People Fleeing International Crimes 

  1. Other prescribed categories like Diplomats, Consular Staff and Employees of International Organizations


B) Certain Types of Residential Property

  1. Recreational Property (the definition is not quite clear yet)

  1. Vacant Land



C) Indigenous Peoples and Communities



D)Some Special Situations Like Unexpected Life Events 


The act establishes penalties that apply to non-Canadians that purchase residential property, whether directly or indirectly in contravention of the prohibition. The act sets out a penalty of up to $10,000 for an offence upon summary conviction. The act also establishes penalties that apply to any persons or entities that counsel, induce aid or abet or attempt to counsel, induce aid or abet a non-Canadian to purchase directly or indirectly, any residential property, knowing that the non-Canadian is prohibited under the Act from purchasing the residential property. 


Governement of Canada Resources:

  1. Justice Laws Website: Prohibition on the Purchase of Residential Property by Non-Canadians Act
  2. Justice Laws Website:  Prohibition on the Purchase of Residential Property by Non-Canadians Act (S.C. 2022, c. 10, s. 235) Full Document
This blog is meant to give a first overview / idea on the topic. The author is not qualified to give advice on implications of this act. The author is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. The reader is strongly advised to consult a qualified real estate lawyer for further information!