Canada has extended its ban on foreign home buyers to 2027. The ban was initially scheduled to be lifted on Jan. 1, 2025, but with mounting concerns over a housing crisis, an additional two years has been placed on the ban, bringing it to Jan. 1 2027.
The federal government had first prohibited non-Canadians from acquiring residential real estate in 2022, with the measure initially scheduled to expire next year.
“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” said Finance Minister Chrystia Freeland in a statement Sunday.
Freeland said that the federal government was worried about Canadians being priced out of their local housing markets.
Non-Canadians who are buying vacant land or residential property that has yet to be developed have been carved out of the ban.
Foreign students and people who hold work permits have also been exempted from the ban as well as long as they have been residing in Canada for an extended period of time and have not previously purchased property.
Canada’s national average cost for a home in December was $730,400, an increase of 36% when compared to the average in 2019.
In places like Toronto, the average home price is $1.1 million and that number goes up to $1.2 million in Greater Vancouver.
According to BNN Bloomberg, the Toronto City Council will review a motion on Tuesday to tax the home purchases of non-residents at a rate of 10% of the property value.
The city tax would be in addition to the already in place “non-resident speculation tax” of 25% imposed by the provincial government.
Toronto’s executive committee is recommending that Toronto approve the motion which aims to “maintain a level of affordability in the residential real estate market by discouraging international buyers from purchasing property in the City of Toronto, particularly those buyers who do not intend to live in the property,” according to a statement from the committee.
“Overall, the introduction of the Municipal Non-Resident Speculation Tax is expected to have a positive impact on reducing speculation, and where speculation may persist the Municipal Non-Resident Speculation Tax will positively contribute to the City’s multi-year budgeting strategy.. Preliminary estimates indicate the City may generate up to $15 million in revenue in 2025, following the lifting of the federal ban.”
