On January 1st, Canada’s partial ban on foreign buyers purchasing property came into an effect. On March 27th, significant amendments were made to the prohibition. Fortunately, these changes make it easier for you to become a homeowner in Canada. Work permit holders and property developers – find out the good news.
What is the partial ban on international property buyers?
Justin Trudeau proposed a ban on foreign buyers in his 2021 election campaign. The act was then passed on June 28th, 2022. It came into effect on the first day of this year. The ban is intended to last for two years.
The thinking behind the ban was that it would prevent international investors from driving up the price of property, as many Canadians were struggling to buy their first home.
Originally, the ban meant that foreigners could not purchase a property in Canada, with a few exceptions. For example, foreign nationals could buy a home if they were a permanent resident or a refugee claimant.
How has the ban been amended?
According to the Canadian government, the amendments have been made to “further support individuals and families seeking to build a life in Canada by seeking homeownership”. As well as to “address housing supply issues”.
Work permit holders
Now, if you hold a work permit or are authorised to work in Canada under the Immigration and Refugee Protection Regulations, you can purchase a residential property.
Work permit holders are eligible if they have 183 days or more left on their work permit or work authorisation at the time of purchase. However, they will not be allowed to do so if they have already purchased more than one residential property.
Furthermore, there will no longer be any tax filings and work experience requirements. Previously, those on a work permit had to work full time and show evidence of taxes filed for at least three of the last four years.
“These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.” – Ahmed Hussen, Minister of Housing and Diversity and Inclusion.
A quick look at work permits in Canada
In Canada, there are two types of work permit: employer-specific work permit and open work permit.
Employer-specific work permit
An employer-specific work permit is dependent on an offer of employment and a contract from a company in Canada. It limits the foreign national to working for one company in Canada, in one position, for a specified amount of time.
Open work permit
By contrast, an open work permit allows foreign nationals to work in Canada without a job offer first. However, only select people are eligible for this work permit. The list includes international students who have finished their studies and those who have applied for permanent residency in Canada. Please check the government website for more information.
Before, those with these work permits would have been impacted by the ban on foreign buyers. Now, if you go to Canada on a work permit and feel that you would like to buy a home there, the process will be much more straightforward.
The rules have been amended so that the ban does not apply to any vacant land zoned for mixed or residential use. This means that foreign property developers are able to purchase the land and use it for any purpose, including housing development.
In addition, foreigners can also purchase residential property for the purpose of development.
Why have these changes been made?
In the first place, the ban was intended to address the housing shortage and to make the property market more accessible to Canadians and permanent residents. The ban was criticised for shutting out many of those that want to build a life in Canada – the amendment targeting those with a work permit addresses this. Secondly, by relaxing rules for international property developers, they are creating more opportunity to put to rest the housing shortage altogether.
Ahmed Hussen, Minister of Housing and Diversity and Inclusion said, “These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities. These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”
Are you looking for advice on moving to or buying in Canada but don’t know how where to start? We have a wealth of information! Read up on the benefits of contacting a currency exchange specialist. As well as the process of buying in Canada and tips for settling into your new home.