Overview of the Prohibition on the Purchase of Residential Property by Non-Canadians Act
The Prohibition on the Purchase of Residential Property by Non-Canadians Act was enacted in order to help safeguard Canadian residential real estate from foreign buyers. This law applies to non-Canadian citizens and permanent residents who wish to purchase residential property in Canada, and establishes certain restrictions on such purchases.
For those looking to buy a residential property in Canada, there are several conditions that must be fulfilled. You need to have physically resided in Canada for at least 244 days out of the 5 years preceding your purchase and can not have purchased another residence while the prohibition is still active. Furthermore, you’ll need to stay within the price limit of $500,000 and meet any other requirements according to your current status.
Additionally, exceptions are made for certain types of property, such as those located outside of a Census Metropolitan Area or Census Agglomeration, and for certain groups, such as foreign diplomatic missions and Indigenous peoples.
The Purchase of Residential Property by Non-Canadians Act was established to guard Canadian residential real estate from foreign buyers, and also offers exceptions that allow non-Canadian citizens or permanent residents to purchase a property in Canada under specific conditions. This act strives to ensure Canadians can access the housing market without being subject to outside influence.
Regulations and Exceptions to this Act
The Regulations provide exceptions for certain types of individuals and property purchases.
First, the prohibition does not apply to permanent residents of Canada who have resided in the country for at least five years, provided they:
- Are enrolled as a full-time student at a designated learning institution as defined by the Immigration and Refugee Protection Regulations.
- Have filed income tax returns for each of the previous five taxation years.
- Have been physically present in Canada for a minimum of 244 days in each of the five calendar years preceding the purchase.
- Have not previously purchased a residential property while the prohibition is in effect.
Second, the Regulations provide an exception for temporary residents working in Canada, provided they:
- Hold a valid work permit or are otherwise authorized to work in Canada.
- Have worked full-time in Canada for at least three years within the preceding four years.
- Have filed income tax returns for three out of four taxation years preceding the year of purchase.
- Have not previously purchased a residential property while the prohibition is in effect.
Third, refugees receive special consideration under these Regulations if they:
- Have obtained refugee protection or are otherwise protected persons under the Immigration and Refugee Protection Act, 2001.
Additionally, refugee claimants and those fleeing international crises may be exempted from this prohibition if they:
- Have made a claim for refugee protection which has been found eligible by the Refugee Protection Division; or
- Have received temporary resident status under humanitarian public policy considerations to provide refuge from conflict.
Finally, accredited members from foreign missions in Canada also benefit from an exemption if they possess valid diplomatic acceptances issued by Ottawa’s Chief of Protocol.
In addition to these exceptions, Section 35 of The Constitution Act 1982 provides protections specifically tailored towards Indigenous peoples living on ancestral lands that may conflict with this law. Specifically, this section recognizes existing Indigenous and treaty rights, including ownership rights to land, rights to occupy and use land resources, land set aside exclusively for First Nations use only, self-government rights and cultural and social rights.
Lastly, an exception is provided if one purchases residential property outside Census Metropolitan Areas or Census Agglomerations as identified by Statistics Canada’s Standard Geographical Classification 2021. These areas generally contain one or more adjacent municipalities centred on population centres or cores with populations exceeding 100 thousand residents – 50 thousand residing within their core – or 10 thousand inhabitants, respectively. Detailed maps outlining CMAs/CAs can be accessed online via Statistics Canada’s Census Tract reference maps website.
Conclusion
The Prohibition on the Purchase of Residential Property by the Non-Canadians Act is a comprehensive law designed to protect Canada’s real estate market from undue influence from foreign buyers. The Regulations provide several exceptions for permanent residents, temporary residents, refugees and members of foreign missions located in Canada, as well as Indigenous peoples living on ancestral lands, which may be exempt from this prohibition. Ottawa Real Estate Lawyers or any other Canadian Real Estate Lawyer can assist with assistance understanding these laws and regulations to ensure that all parties involved are meeting their legal obligations when it comes to purchasing residential property in Canada.
