The Canadian government has decided to maintain the restriction preventing foreign individuals from acquiring residential properties within its territory until 2027, with the aim of addressing the housing affordability crisis affecting several cities across the country.
Chrystia Freeland, the Minister of Finance, confirmed this Sunday the extension of this measure, initially put in place in 2023 and which was supposed to end in 2025. This policy prevents anyone who does not have Canadian nationality or permanent resident status, as well as commercial companies, from purchasing a residence in Canada.
Certain exceptions to this rule have been provided, in particular for holders of a temporary work permit, refugees, and international students who meet specific conditions.
Foreigners who violate this ban could be forced to sell their real estate and pay a fine of up to 10,000 Canadian dollars. Minister Freeland emphasized that this extension aims to ensure that housing remains intended for Canadian families and does not become speculative financial assets. The government asserts its determination to use all means at its disposal to improve housing accessibility across the country.
The decision to extend the ban for an additional two years is justified by the observation that housing problems in Canada will not be resolved by the end of 2024. It is necessary to observe the evolution of the real estate market. According to Mrs. Freeland's office, although this measure has only been in effect for one year, the preliminary data, including that from the private sector, is being carefully analyzed.
According to the most recent statistics from 2020 provided by Statistics Canada, about 7% of condominiums in British Columbia were owned by non-residents for investment purposes, compared to 5.6% in Ontario. These investments were primarily concentrated in the downtown areas of Vancouver and Toronto.
Tom Davidoff, associate professor at the Sauder School of Business at the University of British Columbia, questions the real impact of this measure on housing affordability. However, he acknowledges that taxes on empty homes and foreign buyers in British Columbia and Ontario have already significantly reduced foreign acquisitions.
The government insists that this ban is not a magic solution to the complex housing problem but rather one element among other initiatives designed to address the housing crisis in Canada. Among these initiatives are the elimination of the GST for the construction of new rental housing and the allocation of funds to municipalities for residential development.
