A new Canadian law bans most foreign homebuyers

Canada has been a popular destination among Americans looking to move abroad. Searches asking “how to move to Canada from the US” spiked on Google on several occasions throughout the past years. Americans searched for ways to immigrate to Canada during the 2016 presidential election, after the first debate between Donal Trump and Joe Biden in 2020 and the recent overturn of Roe v. Wade. 

Unfortunately, those exploring a move up north might have to postpone their plans, at least until 2025. A new Canadian law, which came into effect on January 1, bans foreign investors from purchasing residential properties in this country for two years. The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed in Parliament on June 23, 2022. 

The ban aims to address the rising housing costs in major cities and make home ownership more affordable for Canadian citizens. Home prices in Canada have surged over the past three years as mortgage rates fell to historic lows. The average price for a home in Toronto set a record in February 2022 after reaching CAD 1.3 million, CBC reports. 

“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” said the campaign website of Prime Minister Justin Trudeau’s party this past year, according to CNN Business. “This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”

According to the Canadian government, the new ban applies only to cities that meet certain population criteria and excludes vacation homes in “recreational areas”. In addition, the prohibition does not apply to foreign homebuyers with Canadian spouses or partners, refugees, and investors buying multi-family properties with more than three units. International students, who spent the majority of the previous five years in Canada, may also buy a home worth no more than CAD 500,000. 

The law received mixed feedback from both Canadians and non-Canadians. Immigrants make up 23 percent of the country's population, according to data from Statistics Canada. However, less than 5 percent of homeowners in provinces such as Ontario and British Columbia are non-Canadian residents. Canada expects to welcome 465,000 new permanent residents in 2023. However, the recent ban might demotivate some people from moving to Canada and settling there. 

Resources:

“Canadian law places ban on most foreigners buying homes,” by TRD Staff (The Real Deal, 2022)

“Canada is banning some foreigners from buying property after home prices surged,” by Chris Isidore (CNN, 2023)

“Canada's ban on foreign property buyers won't apply to many workers, international students,” by Laura McQuillan (CBC News, 2022)