New Law prohibiting the purchase of residential property by Non-Canadians for a period of two years

For the purposes of the New Law, residential property includes:
A detached house or similar building with three or less dwelling units, all on one single title;
A separately titled semi-detached house, rowhouse unit, or residential condominium unit; and
A lot (vacant or otherwise) that is zoned as residential or mixed use.

A non-Canadian under the New Law includes anyone who is not:

• A Canadian citizen;
• A person registered under the Indian Act;
• A permanent resident;
• A foreign corporation; or
• A private Canadian corporation that is controlled by a non-Canadian(s).

There are a few exemptions to the foregoing that would allow an otherwise non-Canadian to purchase residential property in Canada during the two year ban.

The exemptions include:
1. Property Exemptions:

• Some rural property that is not located near a metropolitan area may be exempted from the New Law;
• By nature of the definition of “residential property”, a detached house or similar building with four or more dwelling units would not be captured under the New Law; and
• A purpose built, or completely for-rent apartment building that is contained on one single title would not be caught by the New Law.

2. Purchaser Exemptions:
A temporary resident that is either:
i.    A student at a designated learning institution, that:

• Has been physically present in Canada for a minimum of 244 days per year for the previous five years before the year in which the purchase is made;
• Has filed all required income tax returns for the five years;
• Is purchasing a property where the purchase price does not exceed $500,000.00; and
• Has not purchased more than one residential property.

ii.    A person with a work permit, that:

• Has worked full-time in Canada for a minimum of three years out of the previous four years before the year in which the purchase is made;
• Has filed all require income tax returns for the three years; and
• Has not purchased more than one residential property.
• A refugee under the Immigration and Refugee Protection Act (Canada) or a person designated as fleeing conflict;
• A spouse of a Canadian when purchasing the property with the Canadian spouse; and
• Foreign nationals such as diplomats or those with similar status.

3. Transactional Exemptions:

• An acquisition resulting from death, divorce, separation, or a gift;
• A non-Canadian that is renting a residential property as a tenant;
• The transfer under the terms of a trust that was created prior to the New Law; and
• An acquisition resulting from the exercise of security by a secured creditor (i.e. a bank foreclosing on a property).

The consequences of contravening the New Law are hefty, with a fine of up to $10,000 for anyone involved in the transaction.  In addition to the purchaser themselves, this may include the realtors on both sides, the lawyers on both sides, the seller, the mortgage broker, and anyone else that was involved in any way – whether they knew the purchaser was a non-Canadian or not.