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Federal Legislation Prohibiting the Purchase of Residential Property

New Federal Legislation Prohibiting the Purchase of Residential Property by Non-Canadians

Starting January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act will come into force. The Act prohibits any individuals who are not Canadian Citizens or permanent residents of Canada from purchasing residential property for two years. This act also applies to corporations who are not incorporated in Canada or are controlled by non-Canadians.

Here are some key points:

  • Prohibits non-Canadians from indirectly/directly purchasing property that is residential for two years. This includes purchases being made through corporations, trusts, or other legal entities.
  • The definition of Residential property in this case includes detached homes or similar buildings of up to three dwelling units as well as parts of buildings like semi-detached houses, strata units, or other similar premises.
  • Establishes penalties for individuals who take part in a non-Canadian residential sale whether they are non-Canadian or not.
  • If this Act is contravened, disciplinary actions can include a court-ordered sale of the home purchased and the Non-Canadian receiving no more than the purchase price paid for the property.
  • Exemptions include individuals such as refugees, individuals who purchased a residential home with their spouse or common-law partner, temporary residents in Canada who satisfy the conditions in the regulations.

Considerations for Regulated Entities

Regulated entities should look over the Act and ensure they are fully made known of who the prohibition applies to and how residential property is defined so they are able to inform potential clients of the new restrictions on residential property sales. Once the Act is in force, any individual who counsels, induces, or abets a non-Canadian to indirectly/directly purchase any residential property is guilty of an offence and can be fined up to $10,000.


If anyone is unsure if a client, property, or transaction falls underneath the Act, they must advise their clients to seek professional advice before continuing to assist them in Real Estate Transactions. Any entities that use standardized forms should update them accordingly to further ensure that buyers are not falling under the category of a Non-Canadian to the Act.

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