Amendments to Canada’s Foreign Buyer Ban: Easing Home Ownership for Newcomers and Boosting Housing Supply
Canada’s housing market is facing affordability concerns, and to address this issue, the Canada Mortgage and Housing Corporation (CMHC) has made changes to its foreign buyer ban. The goal is to enable newcomers to put down roots in Canada through home ownership and allow businesses to create jobs and build homes by adding to the housing supply in Canadian cities.
Ahmed Hussen, the minister of housing and diversity and inclusion, announced the amendments in a news release. These changes include raising the corporate foreign control threshold, providing an exception for development, and repealing legislation to not apply to vacant land or work permit holders.
One of the most notable changes is the increase in the corporate foreign control threshold from three to 10 percent. This change will allow developers to buy property for development, regardless of the ownership structure of the entity.
Another change is the exception for development purposes. Non-Canadians can now acquire residential property for development. This exception extends to an existing exception that applies to publicly traded companies.
According to the new amendments, the foreign buyer ban will no longer apply to vacant land. Non-Canadians can now purchase vacant land that is zoned for residential or mixed-use, as long as they can pursue development.
Finally, those holding a work permit in the country can purchase residential property under the amendment to Canada’s foreign buyer ban. Permit holders are eligible if they have at least 183 days of validity remaining on their permit when they acquire the property.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act went into effect on January 1, 2023, to increase housing affordability in Canada. The amendments to the legislation came into effect on March 27, 2023.
The Canadian Home Builders’ Association (CHBA) welcomed the changes as they will help address supply-related issues by allowing development to continue. The previous regulations had unintended consequences that impeded development, but the recent amendments have largely corrected the situation.
If you’re looking to buy or sell real estate in Vancouver, it’s essential to stay up to date on the latest changes in regulations and laws. With the amendments to the foreign buyer ban, it’s now easier for non-Canadians to invest in Vancouver real estate for development purposes. For more information consult Leo Wilk, your trusted Vancouver Real Estate Advisor.