To regulate housing prices, the federal government of Canada has introduced a prohibition on purchasing residential property by the non-Canadians act. Housing prices have been very high, making it difficult for permanent residents to purchase. The act has become effective from January 1, 2023, prohibiting non-Canadians from directly or indirectly buying residential property for at least 2 years. The legislation was passed due to the big increase of houses during the pandemic.
If you are a Canadian resident and cannot finance your mortgage due to the high prices, there are many options available. You can talk with a mortgage broker to find out more about the options available and how to get affordable financing.
This article will explore Canada’s ban on foreign homebuyers and the changes that are associated with it.
Who Is Impacted By The Ban
The ban is in effect, and different individuals and corporations are affected by it. More precisely, it affects anybody that meets the definition of “non-Canadian.” Under the act, people under the ban include corporations incorporated in Canada and individuals who are neither Canadian citizens nor a permanent resident of Canada.
Additionally, corporations controlled by foreign corporations or individuals who are not permanent residents of Canada are also affected.
Will The Ban Help Bring Prices Down
The Canadian government believes that imposing a ban on foreign buyers will help reduce house prices. However, from the national statistical housing, the ban will not meet the desired effect of making homes more affordable. If you are a Canadian resident, you need to learn about alternative mortgage lenders to get affordable mortgage loans to meet the high prices.
The ban on foreign homebuyers will not affect persons such as refugees or non-Canadian individuals who purchase residential real estate with a common-law partner or spouse who is a Canadian citizen. If you are in this category, you can secure a loan from private lenders in BC to buy a house.
Additionally, temporary residents who meet certain criteria are excluded from the ban, and they have the freedom to purchase a house.
It’s important to note that the infringement of the ban does not affect the validity of the residential property. Buyers and sellers are legally required to comply with their contractual obligations. Sellers can check the private mortgage rates when securing loans to finance their housing projects.
The Types Of Property Affected
The Canadian ban applies to certain properties located in Canada that meet the “residential property.” Some properties include detached houses or similar buildings containing three dwelling units or less. Additionally, any part of the house that is semi detached, rowhouse, or residential condominium intended to be owned apart from other units in the building is included in the ban.
How Bad Is The Housing Crisis?
The housing crisis is improving, and the average price of homes has dropped by 13%. However, the rising interest by the bank of Canada is one of the other major causes for the mortgage prices to go higher. With the ban in play, the housing industry is expected to reduce the cost of housing to help provide affordable housing to residents.
The ban has affected many foreign corporations and individuals, but it aims to reduce housing prices. If you are a resident planning to invest in real estate, consider getting financial assistance from private lenders.