Can Foreigners and Temporary Residents Purchase Property in Canada?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act, will be extended to January 1, 2027. This has left many wondering about their ability to purchase a home in Canada.

In recent years, the cost of housing has skyrocketed around Canada, this Act was introduced as a way to attempt to combat these rising costs. Specifically targeting foreign investors who buy homes in Canada while never actually living in them.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act, will last until 2027. The new regulations prohibit the purchase of residential property by foreign investors who are not Canadian citizens or permanent residents. But does not apply to Canadian citizens or permanent residents, who can still purchase property as before.

The Act specifically bans foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada. Residential property is defined as detached homes or similar buildings, semi-detached houses, rowhouse units, residential condominium units and other similar premises.

This new act has left many confused about their ability to own a home in Canada. However, you may still have options to buy a home even if you are not a Canadian citizen or permanent resident.

What Are the Exceptions?

While it might feel like it, the new Act is now a complete ban on buying properties by foreign investors. Properties like recreational properties, vacation homes and cottages are still allowed under the new law. The law also does not include homes that are outside of census metropolitan areas (cities with populations higher than 100,000).

Additionally, there are exceptions if a non-Canadian purchases a home with a Canadian spouse or common-law partner, but later finds themselves in a transitional situation such as divorce or following a death.

Can Temporary Residents Buy a Home in Canada?

In short, temporary residents, or those on a valid study or work permit, may still be able to purchase a home while the ban is in effect if they meet certain criteria. Among other conditions for temporary residents, the Canadian government requires proof of intent to permanently reside and settle in Canada.

Study Permit Holders: Can an International Student Buy a House in Canada?

A person who is enrolled in an authorized program of study at a Canadian institution must satisfy at least one of the following conditions:

• They filed all required income tax returns under the Income Tax Act for each of the five taxation years preceding the year in which the purchase was made,
• They were physically present in Canada for a minimum of 244 days in each of the five calendar years preceding the year in which the purchase was made,
• The purchase price of the residential property does not exceed $500,000, and
• They have not purchased more than one residential property

It’s important to note that a maximum purchase price of $500,000 may not be enough to buy a home in some major cities or provinces across Canada. For example In Ontario or British Columbia where the average house price exceeds $800,000.

Under Work Permit: Can a Work Permit Holder Buy a House in Canada?

On the other hand, those who are in Canada on a valid work permit also have conditions they must meet such as:

• They worked in Canada for a minimum period of three years within the four years preceding the year in which the purchase was made, if the work is full-time work as defined in subsection 73(1) of the Immigration and Refugee Protection Regulations, (IRPA).
• They filed all required income tax returns under the Income Tax Act for a minimum of three of the four taxation years preceding the year in which the purchase was made, and
• They have not purchased more than one residential property.

This means that those interested in purchasing a property as a temporary worker, must prove that they have at least three years of full-time work history over the last 4 years to be eligible.

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