Canada Prohibits Foreigners From Buying Residential Properties For 2 Years. Know Stance On Immigrants, PR Holders
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Synopsis:-
Starting this year, foreign investors will not be allowed to purchase homes in Canada for at least the next two years following a property price hike.
Starting in 2023, foreign investors will not be allowed to purchase homes in Canada for at least the next two years following a property price hike. A new Canadian law rolled out on Sunday, January 1, banning foreigners from buying residential properties as investments for two years, according to a report in Just News.
Who Can Invest And Who Cannot In Canadian Real Estate?
The law was cleared as a result of a spike in Canadian real estate prices since the outbreak of Covid-19. Some politicians were of the view that foreign buyers were responsible for snapping up the supply of homes as investments.
In the campaign website of Prime Minister Justin Trudeau’s party, this past year noted that “the desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors.”
The website noted this as causing a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. “Homes are for people, not investors,” it added. However, the law provides exceptions to home buyers including immigrants and permanent residents of Canada who are not citizens.
It is to be noted that the steep rise in home prices in 2020 and 2021 was already reversed in 2022 even before the law took effect. Average home prices in Canada peaked just above $800,000 Canadian in February and continued to fall since then, slipping around 13 percent from its peak, the report cited according to the Canadian Real Estate Association.
The Bank of Canada raised interest rates which lead to an increase in mortgage rates in the country – just like in the United States and other countries.
The real estate association raised concerns about the law, even with the exemptions for people who intend to move to Canada. They said the ban may provoke the United States and Mexico to prohibit purchases in those countries by Canadians, especially those who are retired and looking to buy winter homes away from the Canadian winter.
