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Prohibition on the purchase of property by non-Canadians

On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) came into effect for a two-year period. This Act prohibits non-Canadians from purchasing residential properties of all kinds, with or without conditions, directly or indirectly. 

Who is concerned by this prohibition?

The prohibition applies to the following parties:

  • Any individual who is neither a Canadian citizen, nor a permanent resident, nor a person registered as an Indian under the Indian Act.
  • Any corporation that is incorporated otherwise than under the laws of Canada or a province.
  • Any corporation or entity incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange and that is controlled by a person or corporation considered to be non-Canadian.

Exemptions

The Act does not apply to the following individuals:

  • Any Canadian citizen, permanent resident, or person registered as an Indian under the Indian Act as well as their spouse or common-law partner (domestic partnership for at least one year);
  • Any temporary resident, such as a student or a foreign worker who meets the eligibility criteria provided for in the Act;
  • Any non-Canadian who acquires ownership of a property through an estate, divorce, separation, or gift;
  • Any foreign state that purchases a property for diplomatic or consular purposes, or foreign nationals who hold a passport that contains a valid diplomatic, consular, official or special representative acceptance;
  • A refugee who meets the eligibility criteria provided for in the Act.

Please note that this list is not exhaustive and these exceptions are subject to strict eligibility conditions. We recommended consulting with a legal advisor to determine whether or not you are eligible for one of these exceptions. 

Residential properties covered by the prohibition

The prohibition applies to the following residential properties:

  • A detached house or similar building, containing not more than three dwelling units;
  • A semi-detached or row house;
  • A condominium or similar premises;
  • A vacant lot zoned for residential or mixed use;

if the property is located within an area of Canada that belongs to a census agglomeration or a census metropolitan area. Residential properties that are not located within a census agglomeration or census metropolitan area are not subject to the Act. 

Penalties in the event of a breach

Anyone who contravenes the Act, or counsels, induces, aids or abets a contravention of the Act, or attempts to do so, is guilty of an offence and is liable on summary conviction to a fine of not more than ten thousand dollars.

The role of your RE/MAX broker

In the framework of a transaction, your RE/MAX broker is responsible for making sure that you are aware of this prohibition and will discuss your situation with you. This Act contains highly complex stipulations. If you have any doubts or questions about your situation, your RE/MAX broker will encourage you to consult with a legal advisor. Doing so will help ensure you are in a position to carry out your transaction with complete peace of mind. 

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