The new ban on foreign home buyers in Canada comes into effect on January 1. 1. Here's how it works

A two-year federal ban aimed at preventing non-Canadian individuals and companies from buying residential property takes effect January 1. 1. It’s a move that’s supposed to help make housing more affordable for those who live in this country.

The legislation has a host of exceptions, including international students and refugees. But some critics say it’s still going too far.

Here is What do you want to know about how it works:

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the “Non-Canadian Residential Property Purchase Act” Prevents “non-Canadians” and corporations controlled by non-Canadians from buying residential property. “Non-Canadian” means a person who is not a Canadian citizen, a permanent resident or a person registered as an Indian under the Indian act. But there are a bunch of exceptions.

“The ban is a two-year temporary measure that is part of the government’s response to Canadians’ urgent concerns about housing affordability,” read a statement sent by a spokesperson for the Minister of Housing, Diversity and Inclusion, in response to questions about the law. “It is also expected to help reduce the flow of foreign capital into Canada to purchase residential real estate.

There are already taxes on foreign home buyers in Ontario and British Columbia It is difficult to find statistics on home ownership abroad, but in 2017, Statistics Canada estimated that 3.4% of all residential properties in Toronto and 4.8% in Vancouver were owned by non-residents. These figures were higher for condominiums: 7.2% in Toronto and 7.9% in Vancouver.

What happens if you break this law

If a non-Canadian buys a home under this new law, they can be fined up to $10,000 and the home could be sold. It does not apply to tenants.

What are the exceptions

International students are exempt from this prohibition if they meet a host of requirements, including buying a property under $500,000. Temporary foreign workers, who have worked in Canada for at least three years and meet certain other conditions, as well as refugees and asylum seekers, are exempt. The same is true for accredited members of foreign missions in Canada.

Regulations do not apply if they conflict with existing treaty rights of Aboriginal peoples.

Stephen Cryne, president and CEO of the Canadian Employee Relocation Council, said the three-year restriction is “contrary to the government’s overall goals of attracting the best and the brightest to our country.” Under the new regulations, if someone moves to Canada for work, they cannot buy a home right away. Also, if someone recently moved to Canada from another country and already has a home, they won’t be able to buy a new one if they have to move to another city, he noted.

His group is also concerned that relocation companies, which sometimes buy out employees’ homes if they need to move quickly, may not be able to buy homes under this new regulation, as most are not owned by Canadian interests.

In addition, American or multinational companies will not be able to buy employees’ homes so that they can relocate.

“It’s about hand tying a lot of these businesses, at a time when we need to move people across the country,” he said.

Michael Bourque, Executive Director of the Canadian Real Estate Association (CREA), pointed out that permanent residents do not have this status upon arrival in the country.

“Given that we’re in a global competition for talent,” for everyone from artificial intelligence experts to carpenters, saying you can come but can’t buy a house sends “a terrible message,” a- he declared.

What is residential property?

It is defined as buildings with up to three units and parts of buildings such as semi-detached houses and condos. The law does not apply to large multi-unit buildings.

Where does it apply?

The law only applies to residential properties in the census metropolitan area or census agglomerations, in other words, the places where most Canadians live. In case of doubt, the federal government has provide a map Show where the law applies and does not apply.

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