Canada has decided to extend the ban on the purchase of residential real estate by foreigners, which came into effect on Jan. 1, 2023. Initially, the ban was only supposed to be in effect until 2025, but now it has been extended until Jan. 1, 2027.

Details of the new restrictions

The ban applies to home purchases in major cities and suburbs. An exception is made for rural areas and recreational areas.  

Exceptions are made only for certain categories:

  • Foreigners who have been authorized to work in Canada for more than 6 months. They will be able to buy one apartment or house.
  • Foreign firms registered in Canada will also be able to invest in real estate.
  • Students, refugees, and some other categories of foreigners will also be able to buy a home.
  • In addition, it is allowed to buy empty plots of land to build residential houses on them.
  • If someone violates the ban, he will have to pay a fine of up to 10,000 dollars as well as sell the purchased apartment or house.

Such measures are needed to 1) make housing in Canada more affordable for its citizens and 2) prevent foreigners from speculating on the real estate market.

Experts' opinions

The government is confident that the ban will help deal with the housing crisis. However, there is also criticism from experts. In their opinion, the ban will not solve the problem of prices and the availability of housing.

There is already a decline in demand for elite real estate in major cities. In addition, the tax burden for foreign investors is growing. At the same time, the share of foreigners in the housing market is small—about 1-2% of transactions.