Canada is loosening some restrictions that made it difficult for non-Canadians to purchase residential property. Legislation enacted in April 2022 prohibiting purchases of residential real estate by non-residents in Canada for the following 2 years limited the opportunity for foreign home buyers who are not permanent residents or citizens to purchase a home. Canada has announced new laws to make it easier for newcomers to buy a home:
- As of March 27, the Prohibition on the Purchase of Residential Property by Non-Canadians Act was amended non-Canadians on a work permit may now also purchase mixed-use residential and commercial land if they meet certain criteria.
- As of April 1st, financial institutions will able to offer tax-free first-home savings accounts.
The buying restriction were initially implemented due to a housing shortage.
Ahmed Hussen, the minister of housing and diversity and inclusion, announced the changes in a news release from the Canada Mortgage and Housing Corporation (CMHC):
"These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities."
Amended Prohibition on the Purchase of Residential Property by Non-Canadians Act
Under the amended Act:
- Canada work permit holders who have at least 183 days of validity remaining on their work authorization or work permit are now eligible to purchase a residential property in Canada, provided they have not already purchased more than one such property.
- Non-Canadians on a work permit may now purchase vacant land zoned for mixed-use residential and commercial land if they meet certain criteria.
- The current provisions on tax filings and previous work experience in Canada are also being repealed.
Tax-Free First Home Savings Account (FHSA)
The First-Time Home Buyers Plan allows prospective home buyers to save up to $40,000 tax-free. Each year, individuals can contribute a maximum of $8,000 annually to the account which is eligible for tax deduction. Withdrawals made from the account to purchase their first house are non-taxable, similar to a Tax-Free Savings Account.
Canadian Housing Prices Stabilizing
According to the Canadian Real Estate Association (CREA), the national average home price in Canada was $662,437 in February 2023, down 18.9% from the all-time record in February 2022.
The national average Canadian home price is forecasted to decline 5.9% on an annual basis in 2023.
Do You Have Questions About Living and Working In Canada?
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