New Rules in 2023 - Foreign Buyer Ban - BTW
Home Buyer's Tip Wednesday for Short
The Prohibition on the Purchase of Residential Property by the Non-Canadians Act (Foreign Buyers Ban) came into effect on January 1, 2023.
If you have PR (permanent residence) or you have Citizenship, you are NOT considered foreign buyers.
If you only have a work permit or a study permit, you are a foreign buyer, but you can be exempted from the ban, meaning you still can purchase properties in Canada, just pay the additional 20% foreign buyer tax, while other foreigners will be banned to buy properties even if they are okay paying the additional 20% tax.
The ban applies to free-hold residential properties but does not apply to leasehold residential properties and commercial properties. For details, please consult your relator and government site.
The ban also affects how the banks grant mortgages to foreign buyers. Banks like RBC, and BMO used to have quite “loose” policies for foreign buyers, whether the foreign person is on the title or just as a guarantor. Now the mortgage policy has been much stricter. For example, you now have to be on the title, not a guarantor if a foreign buyer wants to apply for a mortgage at certain banks. For exact details, please consult your mortgage specialist.
With all that said, it is anticipated that the Foreign Buyers Ban will NOT achieve its objective of improving housing affordability, given that foreign investment in BC real estate has been less than 0.5 percent of purchases in the last two years.
Please contact me with any concerns you may have.
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