Canada’s Foreign Buyer Ban (A Complete Guide)

Posted on 12 April 2024 Back to News


By: Joshua Clarke & Jennifer Parker

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Contact Jennifer Parker



To address the growing concern of housing affordability in Canada, the federal government has extended the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) until January 1, 2027. This legislation has far-reaching implications for foreign investors, real estate professionals, and the Canadian housing market as a whole. This article provides a brief overview of the Act, its provisions, and potential implications.

Overview of the Act

The intention behind the Act is to curb speculative buying by foreign investors, thereby making housing more affordable for Canadian citizens, permanent residents, and other classes of people more particularly described in the Act. It aims to do this by prohibiting “non-Canadians” (as defined in the Act) from purchasing, either directly or indirectly, residential properties in certain areas of Canada. These areas, known as Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs), are defined by Statistics Canada Standard Geographical Classification (SGC) 2021.

Census Metropolitan Areas (CMAs)

  • Definition: CMAs consist of one or more adjacent municipalities which centre on, and are highly integrated with, a large population centre. CMAs must have a total population of at least 100,000, of which 50,000 or more must live in the core. Other adjacent municipalities may be included in the CMA if they have a high degree of integration with the core.
  • Examples: Barrie, Toronto, Brantford, Peterborough, among others.
  • Intended Impact: The ban on the purchase of residential property by non-Canadians is particularly stringent in CMAs, where housing demand and prices have been significantly affected by foreign investment. By targeting these areas, the legislation aims to directly address the issue of affordability in regions with the highest population densities and economic activity.

Census Agglomerations (CAs)

  • Definition: CAs are also formed by one or more adjacent municipalities centred on a population centre, but they are smaller areas with a core population of at least 10,000. Like CMAs, other adjacent municipalities may be included in the CA if they have a high degree of integration with the core.
  • Examples: Orillia, Midland, Collingwood, Wasaga Beach, among others.
  • Intended Impact: While CAs may not experience the same level of foreign investment as CMAs, they are still included in the legislation to prevent potential spillover effects. As foreign investors may look to these areas as alternatives to CMAs, the inclusion of CAs helps to ensure a more comprehensive approach to managing foreign investment in residential real estate across different urban areas.

Key Provisions of the Act

  • Definition of Non-Canadians: The Act defines non-Canadians as individuals who are neither Canadian citizens nor permanent residents of Canada nor persons registered as an Indian under the Indian Act as well as corporations that are either not incorporated in Canada or are controlled by non-Canadians.
  • Scope of Properties: The prohibition applies to a wide range of residential properties, including detached and semi-detached houses, townhouses, and condominium units within CMAs and CAs.
  • Duration: The ban is set to last until January 1, 2027.

Exemptions and Exceptions

The Act has numerous exemptions and exceptions, including:

  • Canadian Citizens and Permanent Residents: These individuals are not subject to the ban.
  • Protected Persons: Individuals who are protected persons within the meaning of the Immigration and Refugee Protection Act are exempt from the prohibition.
  • Temporary Residents: International students and work permit holders may be eligible to buy a primary residence under certain conditions, such as meeting residency and income tax requirements.
  • Refugees: Individuals who have made a successful claim for refugee protection in Canada may be exempt from the ban.
  • Spouses or Common-Law Partners: Non-Canadians who purchase residential property in Canada with their spouse or common-law partner are exempt if the spouse or common-law partner is a Canadian citizen, a person registered as an Indian under the Indian Act, a permanent resident, a temporary resident who satisfies prescribed conditions, or a protected person.

Additionally, certain acquisitions of property are not considered “purchases” under the Act, including:

  • Acquisition due to death, divorce, separation, or as a gift.
  • Renting a dwelling unit for tenant occupation.
  • Transfers under a trust established before the Act’s implementation.
  • Transfers resulting from a secured creditor exercising a security interest.
  • Acquisition by a non-Canadian for property development purposes.

Enforcement and Penalties

The Act is enforced by the Canada Mortgage and Housing Corporation (CMHC) and other designated authorities. Violations can result in significant penalties, including:

  • Fines: Individuals and entities involved in contravening the Act may face fines up to $10,000.
  • Forced Sale: A court may order the sale of properties acquired in violation of the Act. Proceeds from the forced sale are first used to cover the costs of the sale and any fines. The non-Canadian is then paid an amount that is not greater than the purchase price they paid, after which, any remaining funds are then transferred to the Receiver General for Canada.

Implications for Foreign Investors and the Real Estate Market

The extended ban poses challenges for foreign investors seeking opportunities in the Canadian real estate market. It necessitates a thorough understanding of the Act’s provisions and potential legal avenues for investment. The impact on the housing market is yet to be fully determined, but the legislation aims to improve affordability for domestic buyers.

Role of Real Estate Lawyers

Real estate lawyers play a crucial role in navigating the complexities of the Act, including:

  • Assessing whether you are a “non-Canadian” under the Act;
  • Identifying any exemptions that may apply to your situation;
  • Advising on whether a desired property is located within a CMA or CA;
  • Reviewing property transactions to ensure compliance with the Act and protect against potential penalties; and
  • Advising on restrictions related to indirect property purchases.


The extended Prohibition on the Purchase of Residential Property by Non-Canadians Act represents a significant shift in Canada’s approach to housing affordability and foreign investment in the real estate market. While the long-term effects remain to be seen, it is crucial for stakeholders – particularly foreign investors and real estate professionals – to understand and adapt to the new regulatory landscape. Legal expertise will be essential in ensuring compliance and making informed decisions in this evolving market. For help navigating the Act, please contact one of our real estate lawyers.



This article is current as of April 5th, 2024, and it is intended for general information purposes only. It is not intended to provide legal advice and should not be considered legal advice. Readers with concerns about how this affects particular situations or transactions should obtain the independent review and advice of legal counsel.

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