Purchase of residential property prohibited for non-canadians

Did you know that, since January 2023, corporations and individuals considered non-Canadians are prohibited from purchasing residential real estate in Canada?

Whether it’s a single-family home, a triplex, or a condominium unit, the Act provides for penalties for offenders and any third parties who assist them, with fines of up to $10,000.

However, the Act includes several exceptions, under certain conditions, that allow non-Canadians to acquire residential property, including the following.

1. A non-Canadian may, despite the prohibition, purchase a residential property located outside a census metropolitan area or a census agglomeration as defined by Statistics Canada. This exception aims to encourage investment in areas outside major urban centres.
2. Certain categories of non-Canadian individuals may also be exempted from this prohibition, including temporary residents—if they are working or studying in Canada—subject to specific conditions. The same applies to refugees, accredited members of foreign missions in Canada, and spouses or common-law partners acquiring property with a Canadian citizen partner. Non-Canadians may also be exempt from the Act in cases of acquisition resulting from death, divorce, separation, or a gift.
3. Non-Canadians may also acquire certain properties depending on the intended project. For example, the exception may apply in the case of a purchase for development purposes, rental for personal use, transfers from a trust established before the Act came into force, or even resulting from a creditor’s right over the residential property.

In conclusion, if you plan to sell a property soon, it is crucial to verify that your potential buyers are Canadians or fall under one of the exceptions provided by the law. Consult your notary in advance to avoid any surprises during the transaction—just as you should if you are a non-Canadian looking to purchase property soon.

This article was written in collaboration with Mtre Marie-Pier Drolet, notary at Blanchard Lupien notaries LLP.