CMHC announces revisions to ban on foreign buyers

CMHC announces revisions to ban on foreign buyers

The changes came in response to widespread concerns over housing affordability

The Canada Mortgage and Housing Corporation has announced several changes to the “Prohibition on the Purchase of Residential Property by Non-Canadians Act”, which came into effect on January 1.

The ban forbids any direct or indirect purchase of residential property by non-Canadians for a two-year period.

CMHC said that it made some amendments in response to widespread concerns over housing affordability, in particular the expansion of “exceptions to allow non-Canadians to purchase a residential property in certain circumstances.”

The revisions now allow more work permit holders to purchase a home they can live in while working in Canada.

“Work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at the time of purchase, and they have not purchased more than one residential property,” CMHC said. “The current provisions on tax filings and previous work experience in Canada are being repealed.”

The revisions also repealed the prohibition on land zoned for residential and mixed purposes.

“Vacant land zoned for residential and mixed-use can now be purchased by non-Canadians and used for any purpose by the purchaser, including residential development,” CMHC said.

An exception for development has been included, allowing non-Canadians to purchase residential property for the purposes of development.

“The amendments also extend the exception currently applicable to publicly traded corporations under the Act, to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian,” CMHC said.

Additionally, the changes increased the threshold of foreign control for corporations investing in Canadian housing.

“With regards to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian, the control threshold has increased from 3% to 10%,” CMHC said. “This aligns with the definition of ‘specified Canadian Corporation’ in the Underused Housing Tax Act.”

The changes came into force on March 27.

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” said Ahmed Hussen, Minister of Housing and Diversity and Inclusion. “These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors.”

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