Canada's New Foreign Buyer Ban
Canada’s ban on foreign homebuyers is in effect as of January 1, 2023, barring commercial enterprises and individuals outside of Canada from buying properties in Canada. The ban applies to residential property including detached homes or similar buildings, as well as semi-detached houses, rowhouse units, residential condominium units and other similar premises. The ban does NOT apply to municipalities with a core population of less than 10,000, as well as recreational properties such as cottages and lake houses. Additionally, the law does NOT explicitly ban the purchase of larger buildings with multiple units.
Who is exempt from the ban?
Although the legislation targets non-Canadians, there are some exceptions. Those in Canada with temporary work permits are still allowed to buy residential properties, as are refugee claimants and international students who meet certain criteria.
The ban does NOT apply to those who are Canadian citizens or permanent residents, nor does it apply to non-Canadians who are looking to rent a residential property in Canada.
Non-Canadians with a spouse or common-law partner who is a Canadian citizen, permanent resident, person registered under the Indian Act or refugee are also exempt from the ban.
What happens if you break the rules?
Non-Canadians who violate the ban can be fined up to $10,000 and may be required to sell the property they purchased. Those who knowingly assist a non-Canadian with their purchase can also be fined.
So can you buy a house if you have a temporary status?
If you are on a student visa, work visa, spousal visa, permanent resident or Canadian Citizen, you CAN purchase property as long as you meet the requirements for home ownership. Based on my research, a down payment of at least 20% is recommended should you require financing. This may also mean that you would still need to get mortgage insurance and be required to demonstrate credit history. The requirements for credit history are not as strict, and you can use at least three months of on-time credit card payments, car loan payments, rent payments etc. You would need to speak to a recommended mortgage broker or your bank to assess your eligibility for financing. Speak to the experts. If you are on a visitor visa, you are included in the ban.
Should I buy a house right away now that I CAN?
By taking the time to prepare and plan for your home purchase, you will save yourself a lot of grief and time. More importantly, when the right house for you comes on the market you want to be ready. You want to work with someone that knows the market, understands the incentives available to immigrants, and can help you get the best rates, and be prepared so that you can save money and time.
How do I start preparing?
Start by getting a good credit card. Not all credit cards help you build credit rating. There are some credit cards that are amazing for new immigrants (email me for my list). Pay your bills on time and stay within your budget. With proper budgeting and planning, you can start to save. If you have foreign monies that you can bring over for the downpayment, talk to your bank. There are specific guidelines that allow you to do this. Get a mortgage pre-approval from a recommended broker. A bank will offer you their rates but there are many other lenders out there that can get you qualified with the right financing for you.
New to Sudbury?
Whether you need help with settling well in Sudbury or help with your plan for real estate investing, I am a phone/text away. As an immigrant, I have learnt valuable lessons and continue to reap the benefits of smart real estate investing that allows me to own my own business and live my life in Sudbury.