Foreign Buyer Ban on Residential Property

What Does the Ban Actually Prohibit?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act (S.C. 2022, c. 10, s. 235) prohibits certain persons and entities from directly or indirectly purchasing residential property in Canada. The key terms are broad and encompass more than just signing a purchase contract:

• "Purchase" includes: Any transfer of title, whether by sale, gift, assignment, or any other arrangement. It also includes purchasing a beneficial interest through a corporation, trust, or partnership where the beneficial owner is non-Canadian.
• "Residential Property" means: Detached houses, semi-detached houses, rowhouses (townhomes), residential condominiums, and similar structures with no more than three dwelling units. It does NOT include commercial properties, industrial properties, or apartment buildings with 4 or more units.
• Geographic Scope: The ban applies to properties located within a Census Metropolitan Area (CMA) or Census Agglomeration (CA) — essentially all major urban and suburban markets in Canada. Rural land, farmland, and properties in municipalities outside CMAs/CAs are exempt from the ban. This is a significant carve-out — properties in small towns, rural Ontario, cottage country (if not in a CA), and most agricultural land are not subject to the ban.

Who is Prohibited — Non-Canadians Defined

The following persons and entities are classified as "non-Canadian" and are prohibited from purchasing residential property within CMAs/CAs:

• Foreign Nationals (non-PR, non-citizen visitors): Any person who is neither a Canadian citizen nor a permanent resident and does not qualify for any of the specific exceptions.
• Corporations Incorporated Outside Canada: Corporations formed under the laws of foreign countries, regardless of whether they have a Canadian branch.
• Privately-Held Canadian Corporations with Majority Non-Canadian Control: Any corporation incorporated in Canada but controlled by non-Canadians (defined as non-Canadians owning or controlling, directly or indirectly, 3% or more of the corporation's voting shares or equity value) is prohibited from purchasing.
• Trusts with Non-Canadian Beneficiaries: Any trust where one or more beneficiaries (or trustees) are non-Canadian persons or non-Canadian corporations.

Complete List of Exceptions — Who CAN Buy Despite Being a Non-Citizen

Penalties for Violations — Buyers and Professionals

The Act establishes strict liability for both purchasers and those who assist them:

• Purchaser Penalty: A non-Canadian who purchases residential property in violation of the Act is guilty of an offence and liable to a fine of up to $10,000 CAD. Each violation is a separate offence.
• Third-Party Liability: Any person who "knowingly assists" a non-Canadian in violating the Act — including real estate agents, lawyers, mortgage brokers, and developers — is also guilty of an offence and liable to a fine of up to $10,000 CAD. Professionals cannot simply plead ignorance if they failed to conduct proper due diligence on buyer status.
• Court-Ordered Sale: In addition to fines, a superior court of the province may order the property to be sold. The non-Canadian receives only the original purchase price paid (not the current fair market value, which may be higher). All sale proceeds above the original purchase price are forfeited to the provincial government. This provision is extremely powerful and serves as a major deterrent against circumvention through nominee arrangements.

Practical Due Diligence Requirements for Buyers and Professionals

• Lawyers Must Verify Status: Since the Act imposes liability on those who "knowingly assist" a violator, conveyancing lawyers and notaries in Canada now routinely require all property buyers to sign a statutory declaration confirming their immigration status and eligibility to purchase. This includes showing PR cards, work permits, study permits, and tax return filing history.
• Real Estate Agents: REALTORS® are required under their provincial regulatory bodies to inquire about buyer eligibility. The Canadian Real Estate Association (CREA) has issued guidance requiring agents to document buyer status verification in their transaction files.
• Work Permit Holder Tax Return Requirement: For work permit holders claiming the exception, the 3-of-4-years tax filing requirement means that recent arrivals — even those with valid work permits — may not immediately qualify. A worker who arrived in Canada in 2024 on a work permit has only one year of Canadian tax returns available and would not meet the 3-year filing requirement until at least 2027.