On Sunday, Prime Minister Justin Trudeau imposed a temporary two-year moratorium on foreigners buying residential property in Canada. The Canadian government wants to make more homes available for locals facing a housing crunch. But refugees and others are allowed to buy homes under exceptional conditions
• The liberal government of Canada imposes a temporary two-year ban on foreigners buying residential properties
• It was a poll promise made during the 2021 election campaign
• Other markets have also imposed taxes on non-residents and empty homes
What Is The New Act Barring Foreigners From Buying Residential Properties In Canada?
The Liberal government enacted the Prohibition on the Purchase of Residential Property by the Non-Canadians Act following their victory in the 2021 elections. They had promised more homes for locals during the elections. It is a temporary two-year ban on foreigners buying residential properties in Canada but refugees and permanent residents who are not citizens are allowed to buy homes as exceptions. Also, the government clarified that the ban will apply to city homes and not to recreational properties like summer cottages. Also, cities like Vancouver and Toronto have introduced taxes on non-residents and empty homes.
Why Is The Condition Of the Real Estate Market In Canada?
The Liberal party said during their election campaign that The desirability of Canadian homes was attracting profiteers, wealthy corporations, and foreign investors. That was leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes were for people, not investors.
According to the Canadian Real Estate Association, average home prices at the start of 2022 were more than Can$800,000 (USD 590,000) but the prices came down to just over Can$630,000 (USD 465,000) last month.
What Do Experts Say About Real Estate Market In Canada?
Many experts believe the temporary ban on foreign buyers will have little impact on the availability of more homes for locals as foreigners account for less than 5% of home ownership in Canada (National Statistical Agency). Canada needed close to 19 million housing units by 2030 said The Canada Mortgage and Housing Corporation in a June report.