The Canadian government recently announced a ban on non-residents from buying homes in Canada, which will come into effect on January 1. While this move aims to improve housing affordability for Canadians, certain exemptions have been introduced to accommodate specific groups of individuals. Let's take a closer look at who will be exempt from this ban.
Exemptions from the Ban
Here are the groups of people who will be exempt from the ban:
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Canadian Citizens and Permanent Residents: Canadian citizens and permanent residents will not be affected by the ban. They can continue to buy property as usual.
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International Students: International students who meet certain requirements, including having spent the majority of the previous five years in Canada, will be allowed to purchase a property. However, the property must not exceed $500,000 in value.
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Workers with Tax Returns: Those who have worked in Canada for at least three out of the four years prior to purchasing a property and have filed tax returns will also be exempt from the ban.
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Diplomats and International Organizations: Diplomats, consular staff, and members of international organizations residing in Canada will not be affected by the ban.
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Temporary Residents: Foreign nationals with temporary resident status, including refugees and individuals fleeing conflict, will be exempted.
Moreover, buildings with more than three dwelling units and recreational properties, such as cottages and cabins, will also be exempt from the ban.
Transition to Permanent Residency
The Canada Mortgage and Housing Corporation (CMHC) has stated that foreign workers and international students who have been living in Canada for extended periods and are actively working towards permanent residency will be allowed to purchase homes. This is to ensure that their transition to Canada is smoother, as they may face difficulties in finding housing options.
However, individuals falling into these categories will need to provide sufficient evidence to prove their eligibility for the exemptions based on their length of stay in Canada.
Penalties for Violating the Ban
Non-residents who purchase property in violation of the ban, as well as those who knowingly assist them, can be convicted and fined up to $10,000. Additionally, the courts have the power to order the sale of the property.
The exact number of individuals who will be exempt from the ban has not been disclosed by the CMHC at this time.
Mixed Views on the Ban
According to data from the Canadian Housing Statistics Program, non-residents currently make up less than four percent of residential property owners in most parts of Canada. Therefore, the impact of the ban on the housing market remains uncertain.
The Canadian Real Estate Association (CREA) has expressed concerns regarding the additional costs realtors may face while assessing buyer eligibility and determining property classifications. This may result in increased documentation requirements for all prospective buyers to ensure compliance with the ban.
In conclusion, while the ban on non-residents buying homes in Canada aims to improve housing affordability for Canadians, several exemptions have been introduced to accommodate specific groups of individuals. These exemptions will ensure that foreign workers, international students, and other eligible individuals are provided with the opportunity to purchase property in Canada.
