Purchasing property in Ontario as a non-resident has grown increasingly complex due to regulatory measures designed to limit foreign investment and speculation in the real estate market. A thorough understanding of these rules is essential for informed decision-making. This guide provides an overview of the key considerations for non-resident buyers.
Federal Foreign Buyer Ban
A critical regulation is the Prohibition on the Purchase of Residential Property by Non-Canadians Act, enacted on January 1, 2023. Initially set to expire in 2025, the prohibition has been extended to 2027, further narrowing opportunities for foreign buyers. This law prohibits non-Canadians from purchasing residential properties with three or fewer dwelling units in Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs). Violations can result in fines of up to $10,000 and, in some cases, forced property sales.
Exceptions and Exemptions
Despite the ban, certain groups may qualify for exemptions:
- International students who have spent the majority of the past five years in Canada may purchase properties valued at no more than $500,000.
- Work permit holders with at least 183 days remaining on their permits at the time of purchase, intend to occupy the property while working in Canada, and not have purchased more than one residential property, may also qualify.
- Refugees and temporary residents with refugee status are exempt.
- The applicant must obtain permanent resident status within four years of the purchase.
- The property must be owned by the applicant and/or their spouse, as defined under Ontario’s Family Law Act.
- The property must serve as the principal residence of the applicant and spouse, beginning within 60 days of registration and continuing until the rebate application is submitted.