Effective January 1, 2023, foreign nationals are not allowed to buy residential properties in Canada, as per reports. The Canadian government announced this decision to ban non-residents from owning homes for 2 years as part of its budget proposals in view of surging property prices in the country and with an aim to give local residents access to affordable housing, according to a CNN report.
The North American country brought this law seeing a spike in home prices since the start of the pandemic, and also many in the government and policymaking team believed that foreign buyers were responsible for surging property rates as they were investing big money in residential homes as investments.
Average home prices in Canada peaked 800,000 Canadian dollars in February and have come down steadily since then, down about 13 percent from peak, the CNN report said citing the Canadian Real Estate Association data.
Like in many other countries globally, the Canadian central bank too has raised interest rates, making home loans costlier in the country. This has also been one of the prime reasons which pushed the property prices higher in Canada.
After the new law banning foreigners from buying properties was released, the Canadian government also came out with a set of clarifications, saying that there are certain exemptions that give access to some categories of people.
“Homes should not be commodities. Homes are meant to be lived in, a place where families can lay down roots, create memories, and build a life together,” Ahmed Hussen, the minister of housing and diversity and inclusion, had said when the ban was announced.
The new law basically implies that the buying of residential properties will be banned for non-Canadian entities, including companies. This will also mean that Canadian entities under foreign control cannot buy residential property in the country.