Canada Proposes Banning Foreigners from Buying Homes for Two Years

Canada’s federal government announced on Thursday plans to ban foreigners from purchasing homes in Canada for two years in an effort to lower surging home prices within the North American country, the BBC reported.

Canadian Finance Minister Chrystia Freeland unveiled the temporary measure on April 7 when announcing her ministry’s latest budget. In addition to banning foreigners from buying homes within Canada for 24 months, Thursday’s budget proposal allocated billions of dollars “to spur new construction and proposes new programmes, such as a tax-free savings account for first-time buyers,” according to the BBC.

“The proposed ban on foreign buyers would exempt permanent residents and foreign students and workers, as well as those buying their primary residence,” the British broadcaster relayed.

“The proposal builds on actions such as special taxes that some parts of Canada have already taken against out-of-town and foreign buyers,” according to the BBC.

The broadcaster referred to the Canadian province of Ontario, where local premier Doug Ford raised an existing tax on home purchases by foreign buyers from 15 percent to 20 percent on March 30. The tax hike expanded to apply to the entire province of Ontario after previously being enforced only in Toronto, the provincial capital. Toronto is home to an estimated 6.2 million people and is Canada’s largest city.

Leftist Canadian Prime Minister Justin Trudeau addressed Toronto’s rising housing costs in June 2021 while successfully campaigning for reelection.

“The cost of housing has risen across the country driven by a mix of low interest rates and demand outstripping supply as Canadians working from home look for more space,” he told the Federation of Canadian Municipalities on June 1, 2021, as paraphrased by the Canadian Press.

“[T]he result is that the cost of owning a home is too far out of reach for too many people in Canada’s largest cities,” Trudeau said, noting “it can take 280 months for an average family to save for a down payment in a place like Toronto.”

The prime minister vowed at the time to provide “municipal leaders federal backing and resources toward efforts to address the high cost of housing.”

Trudeau offered the assistance as part of a greater promise to make housing more affordable for Canadian citizens nationwide. He was forced to address the issue after home prices in Canada jumped more than 50 percent from 2020 to 2022.

Canada’s housing market “saw a record monthly increase in February as buyers acted ahead of rate increases by the Bank of Canada, taking the benchmark price of a home to C$869,300 [$690,528.45 USD],” Bloomberg reported on April 8.