Prohibition of Residential Property Purchases by Non-Canadians Act

• The Prohibition on the purchase of residential property by non-Canadians Act was passed by Parliament on June 23, 2022 and came into force on January 1, 2023.

• The Act applies to non-Canadians purchasing residential property in Canada for the next two years.

• This prohibition includes detached houses, semi-detached houses, condominium units, and similar premises.

• This also applies to direct or indirect purchases made through corporations, trusts, or other legal entities. Any corporations with a Non-Resident ownership of 3% or more is considered a foreign entity.

• Penalties are established for non-compliance and for anyone assisting a non-Canadian in violating the prohibition, that includes Real Estate agents, Mortgage specialists, Lawyers .. etc.

• If a non-Canadian, or anyone who knowingly assists a non-Canadian, is convicted of violating the prohibition, they will have to pay a fine of up to $10,000. Additionally, a court can order the sale of the residential property.

The government has made amendments to the Act's accompanying regulations to expand exceptions for certain circumstances.

• The amendments allow non-Canadians with valid work permits and work authorizations to purchase residential property if they have 183 days or more of validity remaining and have not bought more than one property.

• Non-Canadians on work permit would need to have filed their taxes for the past 3 years and have been in Canada for the past 244 days.

• Non-Canadians can now purchase vacant land zoned for residential and mixed use for any purpose, including residential development.

• The control threshold for privately held corporations or entities controlled by a non-Canadian has increased from 3% to 10%.

• These amendments came into force on March 27, 2023.
  
  

• Read More: https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/consultations/prohibition-purchase-residential-property-non-canadians-act

Non-Resident Speculation Tax

This is an Ontario Provincial Tax

• • Effective October 25, 2022, the Non-Resident Speculation Tax (NRST) rate was increased to 25 per cent. The NRST applies on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are foreign nationals (individuals who are not Canadian citizens or permanent residents of Canada) or by foreign corporations or taxable trustees.
    
    

  • The NRST applies in addition to the general Land Transfer Tax (LTT) in Ontario.

  • Read More: https://www.ontario.ca/document/non-resident-speculation-tax