8 ELM downtown.Canada has a total ban on foreigners from buying houses. Canada’s bill banning foreign buyers from buying residential properties in the country came into effect on January 1, 2023 local time, and will last for two years.Please Visit: 8 ELM downtown to Get Your VVIP Registration Today!
The bill aims to provide more housing for locals facing a housing crunch. In late December 2022, the Canadian government said the ban applied only to urban housing, not to recreational residential properties such as summer villas.
Canadian citizens and permanent residents are not subject to the ban, the Canadian Broadcasting Corporation reported. Other potential buyers face different rules. Among them, international students and foreign workers can buy a property as long as they have lived in Canada for a certain number of years, indicating that they intend to become permanent residents. If the ban is violated, the person concerned may be convicted and fined up to $10,000.
The “purchase ban” was proposed by Canadian Prime Minister Justin Trudeau during the 2021 election campaign, when Canadian house prices soared, making it impossible for many locals to buy houses. “the house is for people to live in, not just for investors to speculate,” Trudeau said in his election speech. He believes that the Canadian housing industry has attracted a large number of foreign investors, resulting in high vacancy rate and low utilization rate in Canada. After winning the election, the Trudeau government introduced the Prohibition of non-Canadians from buying Residential property Act, and major markets such as Vancouver and Toronto further raised the real estate “foreign buyer tax”. British Columbia levies a 20% tax on international home buyers, and Ontario raised the real estate speculation tax on foreign buyers from 20% to 25% in October 2022, the New York Times reported.
To control inflation, the Bank of Canada has adopted an aggressive monetary policy, driving up mortgage rates, and for sellers, the Canadian real estate market has begun to cool down. The average house price in Canada has fallen from a peak of more than 800000 Canadian dollars (4.08 million yuan) in early 2022 to about 630000 Canadian dollars last month, according to the Canadian Real Estate Association. Foreign real estate investment as a share of residential sales fell from 9 per cent in June 2016 to about 1 per cent in June 2022, according to the British Columbia Finance Department.
However, there are still many real estate policy experts who question the practical effectiveness of the Canadian ban. Agence France-Presse quoted property experts as saying that according to Canada’s national statistics agency, Canada’s ban on foreign buyers will not have the desired effect of reducing house prices, because this market share accounts for less than 5% of Canada’s home ownership market. Brendon Ogmundsen, chief economist of the British Columbia Real Estate Association, said that one of the main reasons for the rise in house prices is actually very low supply.