Canada’s Temporary Resident purchasing a house in 2023 is what many have been wondering about. This is primarily because of the recent Residential property prohibition under the Non-Canadians Act. The change came into existence on January 1 this year. This prohibition regarding the purchase of a residential property will remain in effect until two years.
According to the latest regulations, foreign investors without Canadian citizenship or permanent residency will not be allowed to purchase residential property. Conversely, Canadian citizens or permanent residents will have permission to buy Canadian property just like before.
The housing cost of Canada’s residential property has reached its peak. Hence, the Non-Canadians Act created this regulation to address the surpassing housing cost.
Additionally, this act mainly revolved around foreign investors who tend to purchase homes but hardly reside in them. The act emphasizes a ban on foreign commercial enterprises and those who don’t hold Canadian citizenship or Canadian Permanent Residency. Furthermore, it prevents them from buying residential and recreational property in Canada.
The Residential Property falls under the category of detached homes, residential condominium units, semi-detached houses, rowhouse units, etc.
Also, this new act has left several people questioning their right to buy their own homes in Canada. However, even if foreign nationals aren’t Canadian Permanent Residents or Canadian citizens, they still have a variety of alternatives to buying a home.
Canada’s Temporary Resident Purchasing a House- what are the exceptions of the new Act?
The new Act appears to completely prevent foreign investors from purchasing properties in Canada. Contrarily, they still have the authority to purchase recreational properties, cottages, and vacation homes, per the new law. Moreover, this law excludes dwellings outside the Census Metropolitan Areas. The population in these areas is over 100,000.
Also, this includes exceptional circumstances, like if a non-Canadian buys a home with their Canadian spouse or common-law partner. However, if they later decide to separate or if the partner dies.
Canada’s Temporary Resident Purchasing a House- what is the Possibility?
Temporary Residents or those individuals who hold a study or work permit might still have the authority to buy a house despite the ban being effective if they fulfill certain criteria.
Apart from all other criteria, temporary residents must demonstrate their intention to permanently settle in Canada.
Study Permit Holders
A person with enrollment in an authorized study program at a Canadian institution will need to fulfill any one of the following conditions:
- Their Tax filings are complete under the Income Tax Act for all five taxation years. This must precede the year in which they made the purchase.
- Following their purchase, they were able to mark their physical presence in Canada for at least 244 days in each of the five years.
- The residential property’s purchase cost must not surpass $500,000.
- No prior record of purchasing more than one residential property.
Moreover, the maximum purchase cost of $500,000 might be insufficient to purchase a home in Canada’s major cities or provinces. For instance, in British Columbia and Ontario, the average purchasing cost of a house would be nearly $800,000.
Work Permit Holders
On the other hand, those in Canada with a work permit validity might also have to fulfill certain conditions; they’re as follows:
- If the employment is full-time, according to paragraph 73(1) of the IRPA, they must have worked in Canada for a minimum of three years within the four years before the year the purchase was made.
- They have not purchased beyond one residential property. Also, they have submitted all required income tax returns under the Income Tax Act for at least three of the four taxation years prior to the year in which the transaction was made.
Furthermore, this implies that the candidates purchasing a property as temporary workers must prove that they have worked full-time for a period of three years in the last four years if they seek eligibility.
