OTTAWA, Jan 8: As prices have shot up and there is a scarcity of homes for
the natives, Canada has barred foreigners and non-Canadian immigrants from buying
property in the country. This law has taken effect from January 1, 2023. The
objective of the new law is to make homes available for the natives at affordable
prices, it is claimed.
Indians constitute 5% of the population of Canada. The irony is that the ban
has been imposed at a time when Canada needs a higher than usual immigrant workforce
and has raised the immigration target to 465,000 new permanent residents for
the current year.
The skyrocketing prices of property were attributed to foreigners and foreign
businesses cornering all the available spaces in the cities for the purpose
of investment. This has, interestingly, resulted in a large number of homes
lying vacant while the citizens are facing a shortage of affordable dwelling
units.
The cost escalation has also been attributed to rising mortgage rates. However,
the prices are falling since last February after reaching US $800,000 for an
average home. The drop has been 13%.
The Canadian Real Estate Association (CREA) has said that the new law will
scar Canada's reputation as a multicultural destination. "As currently proposed,
the prohibition on the purchase of residential property by non-Canadians can
impact our reputation as a welcoming nation," it said in a statement.
The law, it is feared, will also boomerang on Canadians seeking property in
other countries, mainly the US.
The Parliament passed the legislation - the Prohibition on the Purchase of
Residential Property by Non-Canadians Act - on June 23, 2022, which came into
effect on January 1, 2023.
Key Clauses:-
- The Prohibition on the Purchase of Residential Property by Non-Canadians
Act prevents non-Canadians from buying residential property in Canada for
2 years starting on January 1, 2023.
- The Act defines residential property as buildings with 3 homes or less,
as well as parts of buildings like a semi-detached house or a condominium
unit. The law does not prohibit the purchase of larger buildings with multiple
units.
- The Act has a $10,000 fine for any non-Canadian or anyone who knowingly
assists a non-Canadian and is convicted of violating the Act. If a court finds
that a non-Canadian has done this, they may order the sale of the house.
This does not apply to non-Canadians who are looking to rent.
A purchase as per the Act does not include:
(a) the acquisition by an individual of an interest or a real right resulting
from death, divorce, separation or a gift;
(b) the rental of a dwelling unit to a tenant for the purpose of its occupation
by the tenant;
(c) the transfer under the terms of a trust that was created prior to the coming
into force of the Act; or
(d) the transfer resulting from the exercise of a security interest or secured
right by a secured creditor.
The Act also sets out conditions for a temporary resident who is allowed to
purchase property.
Prime Minister Justin Trudeau had made the legislation a poll plank during
his 2021 election campaign in order to check the rising real estate prices,
which have started falling since last year.
Canada's population is 38.2 million of which Indians are 1.86 millions, that
is 4.9%.
SEE Gazette: Prohibition on the Purchase of Residential Property by
Non-Canadians Regulations
