Finance Minister and deputy Prime Minister, Freeland, has announced a significant extension to the ban on foreign buyers acquiring Canadian Real Estate. the move comes amidst ongoing concerns about housing affordability and the impact of foreign investment on the market. The current ban was set to expire on 01 January 2025, and it will now be extended until 01 January 2027.
Addressing Housing Affordability 
- Government Initiative: The two-year extension aims to alleviate concerns about foreign money influencing housing prices and Canadian families being priced out of the market.
- Support for Homeownership: By preventing non-citizens, non-permanent residents and foreign-controlled corporations from purchasing Canadian real estate, the government aims to prioritize homeownership for Canadians over speculative investment.
Implications of the Prohibition
- Limiting Speculation: The ban seeks to curb speculation and reduce demand, ultimately aiming to lower housing prices.
- Impact on Mortgage Brokers: Mortgage brokers face penalties of up to $10,000 if found to counsel, induce, aid, or abet a non-Canadian in violating the prohibition.
Exemptions and Penalties
- Criteria for Exemptions: Temporary residents, refugees and certain diplomatic personnel are exempt from the prohibition under specific conditions outlines in the legislation.
- Enforcement Measures: Non-Canadians found violating the ban may face fines of up to $10,000, with potential liability extending to corporations and individuals involved in the offense.
Considerations for existing Contracts
- Pre-Existing Agreements: Contracts of Purchase and Sale entered into, or assumed before 01 January 2023, may be exempt from the prohibition, provided certain criteria are met.
- Legal Guidance Recommended: Given the complex nature of real estate transactions, seeking legal advice regarding existing agreements is advisable.
The legislation is set to be automatically repealed on 01 January 2027. Of course, this does not mean the government cannot change its mind and extend the two-year period or even make the prohibition permanent.
