Homeowners everywhere are watching as the Canadian government implements its new Prohibition on the Purchase of Residential Property by Non-Canadians Act, which went into effect on January 1, 2023. The Act defines residential property as any building with three homes or less and parts of buildings like a semi-detached house or a condominium unit. Fortunately, the law does not prohibit the purchase of larger buildings with multiple units. Of consequence is that violators face a penalty of up to $10,000 in fines, and if punishable by a court order they may be required to sell the property. It’s important to note that this legislation only applies to those looking to buy property and not rent; non-Canadians are still free to find rental options.
The Government of Canada recently passed a new law to help make homes more affordable for people living in Canada. The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians and corporations controlled by non-Canadians from purchasing residential property in Canada for 2 years. This article will discuss how this law helps Canadians and why it is necessary.
How It Helps Canadians
The purpose of the Prohibition on the Purchase of Residential Property by Non-Canadians Act is to make homes more accessible and affordable to Canadians. By preventing non-Canadian individuals or corporations from purchasing residential property, there is less competition for Canadian buyers in the housing market. This means that there are fewer people bidding on properties, which drives down prices and makes it easier for Canadian residents to purchase a home.
In addition, this law helps reduce speculation in the market. Speculators often purchase property with no intention of living in it, driving up prices and making it difficult for first time buyers to enter into the housing market. With this legislation in place, speculators are prohibited from buying homes, which stabilizes the market and makes it easier for people who actually intend to live in their homes can afford them.
Click the following link to read what the CMHC have to say => https://www.cmhc-schl.gc.ca/en/media-newsroom/notices/2022/ensuring-housing-owned-canadians#:~:text=living%20in%20Canada.-,The%20Prohibition%20on%20the%20Purchase%20of%20Residential%20Property%20by%20Non,to%20Canadians%20for%20their%20feedback.
Why It Is Necessary
It is important to note that this legislation does not prevent all non-Canadian individuals or corporations from purchasing residential property. Rather, it prevents those who do not plan to reside or operate a business in Canada from doing so. This ensures that foreign investment still has an opportunity to enter into the Canadian real estate market while also protecting homeownership opportunities for Canadian citizens and permanent residents alike.
Conclusion:
The Government of Canada’s new law prohibiting non-Canadians or corporations controlled by non-Canadians from purchasing residential property helps make homes more affordable and accessible for Canadians. This law helps reduce speculation in the housing market as talked about above. By taking these steps, Canadians will have a better chance at owning their own home without being priced out of the market due to competition from international investors.
We advise contacting one of our knowledgeable Mortgage Tree brokers, who have the inside knowledge and expertise to guide you properly. https://mortgagetree.ca/contact-mortgage-tree/
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