As of January 1st, the Canadian government has enacted a two-year ban on foreign nationals purchasing residential properties in an effort to stem rising housing costs.
The two-year foreign buyer ban came into effect on January 1st while the new policy had been passed in parliament last June.
However, the new policy makes exemptions for many foreign nationals to purchase homes in Canada, including those in Canada on student visas and those in Canada on temporary work visas, the Canadian broadcaster CBC reports.
Some experts have criticized the ban, including the chief economist at the British Columbia Real Estate Association, Brendon Ogmundson, who stated, “I think this is very much a political policy, more than an economic policy.”
“A lot of the public has been convinced over the last few years that it’s foreign investors and foreign money that are driving home prices, rather than what’s actually doing it: low interest rates and very low supply,” he added.
Citizens of Canada and those with permanent residency are both completely exempt from the purchase ban, while international students and foreign workers must live in Canada for a number of years and may purchase one property. International students are also banned from buying a property with a value over $500,000.
Those in Canada with temporary residency permits or those with refugee status are not banned from purchasing properties if they meet certain criteria and exceptions exist for foreign buyers of cottages, and vacation homes and the rules only apply to residential properties with three or fewer units.
The ban is aimed at curbing the rising costs of houses, with areas like the city of Vancouver seeing a crisis that has lasted several years.
A Canada Revenue Agency (CRA) study conducted in 1996 and released in 2021, found that a majority of homes in the Metro Vancouver areas of Burnaby and Coquitlam had been bought by wealthy immigrants who had been declaring small incomes.
In one case, an immigrant who claimed to have made only $174 in 1994 had purchased a home in the area worth $2.88 million.
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