When does the prohibition officially take effect?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act comes into force on January 1, 2023.

How long will the prohibition be in effect?

Two years (subject to any amendments to the Act).

Who is affected by the prohibition?

Non-Canadians are affected. The Act defines a non-Canadian as follows:

(a) An individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident.

(b) A corporation that is incorporated otherwise than under the laws of Canada or a province.

(c) A corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b).

(d) A prescribed person or entity.

The Act goes on to define “prescribed” as “prescribed by regulation”.

What types of property are covered by the prohibition?

Residential property. The Act defines residential property as follows:

Any real property or immovable, other than a prescribed real property or immovable, that is situated in Canada and that is…

(a) A detached house or similar building, containing not more than three dwelling units, together with that proportion of the appurtenances to the building and the land subjacent or immediately contiguous to the building that is reasonably necessary for its use and enjoyment as a place of residence for individuals.

(b) A part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises that is, or is intended to be, a separate parcel or other division of real property or immovable owned, or intended to be owned, apart from any other unit in the building, together with that proportion of any common areas and other appurtenances to the building and the land subjacent or immediately contiguous to the building that is attributable to the house, unit or premises and that is reasonably necessary for its use and enjoyment as a place of residence for individuals.

(c) Any prescribed real property or immovable.

For clarity, the Act goes on to define a dwelling unit as “a residential unit that contains private kitchen facilities, a private bath and a private living area”.

Are there any exceptions to the prohibition?

Yes. In accordance with Section 4(2) of the Act, the prohibition does not apply to the following persons:

(a) A temporary resident within the meaning of the Immigration and Refugee Protection Act who satisfies prescribed conditions.

(b) A protected person within the meaning of subsection 95(2) of that Act.

(c) An individual who is a non-Canadian and who purchases residential property in Canada with their spouse or common-law partner if the spouse or common law-partner is a Canadian citizen, person registered as an Indian under the Indian Act, permanent resident or person referred to in paragraph (a) or (b).

(d) A person of a prescribed class of persons.

If you have any inquiries regarding the foreign buyer ban, please contact Kormans LLP at 905-270-6660 or info@kormans.ca to speak to one of our Real Estate Lawyers.

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