Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act (S.C. 2022, c. 10, s. 235) (“the Act”) came into force on January 1, 2023. The Act is intended as a response to rising housing prices. According to RBS, the Act prohibits “non-Canadians” from purchasing residential property directly or indirectly from January 1, 2023 to December 31, 2024.

Analysis by Dentons finds that the recently published regulations associated with the Act (the “Regulations”) have greatly expanded the original scope of the Act such that the Act may now effectively prohibit a broad range of commercial transactions by corporations and other entities which have a degree of foreign ownership or control. Furthermore, the foreign homebuyer ban may apply to commercial real estate, according to Dentons, as a “residential property” is not limited to traditional residential real estate such as homes, townhomes and residential condominiums, nor is current use determinative. The Regulations, according to the analysis, deem “residential property” to include any land (whether vacant or developed) that meets the following criteria: 1.) the land does not contain any habitable dwelling; 2.) the land is zoned for residential use or mixed use; and 3.) the land is located within a census agglomeration or a census metropolitan area. The broad wording of the criteria could envelope some farmland and commercial real estate assets.

Key definitions from the Act can be found here.

Last Updated on February 9, 2023 by Ramin Seddiq