The Canadian Government announced that it has extended the ban on foreign buying of Canadian housing implemented in 2022. At this time, the ban will expire in January 2027. Chrystia Freelance, the Finance Minister of Canada, made this announcement.
This ban was to be temporary when it was introduced, but now it will exist until the start of 2027. The ban prevents commercial enterprises and foreign nationals from purchasing any residential property located in Canada. Some exemptions apply to temporary workers, international students, and refugees.
The decision to extend the foreign buying ban has a purpose. The government of Canada is dedicated to ensuring that homes in Canada are accessible to Canadian families. The housing shortage in Canada continues to be a top issue for government to tackle. They don’t want to see homes as assets for those not living in them but buy them for financial gain.
Experts have different opinions regarding whether this ban will help the housing problem in Canada or not. The percentage of homes in Canada owned by those who aren’t citizens is minimal. In a study completed in 2020, it was as low as 2% in some areas. The highest areas were only at 6%. Another study in 2021 revealed that just over 1% of homes in Canada have a foreign buyer tied to them.
Home buying rules can be complex, and there are ways to get around this foreign buying ban in Canada if someone wants such ownership. For example, some rules make it possible to buy a building with at least four residential units in some of the denser populated areas of Canada by foreign buyers.
Brendon Ogmudson, a leading economist, has shared his stand on the ban. He believes it has more to do with politics than housing issues or economic policies. What is the agenda? It could have something to do with the announcement of the Canadian government providing $162 million for vulnerable communities, including those seeking asylum in Toronto.
Another $20 million will go to the Toronto region through the Canada-Ontario Housing Benefit. This helps those with lower income levels as a subsidiary for their rent. There are provinces in Canada with a foreign home buyer tax requirement. Recently, Toronto proposed a municipal levy that would only apply to residential homes purchased by non-Canadians.
According to the CMHC (Canada Mortgage and Housing Corp), the affordable housing crisis is unprecedented. By 2030, there will be a need for 3.5 million more housing units than currently in place. Pierre Poilievre, a conservative leader, says the government has to focus on this housing situation. He coined the current situation as “housing hell” for many throughout Canada.
His proposals include incentives to get housing projects off the ground. This includes rewarding municipalities that meet challenging housing needs. Federal funds will go to those who succeed; fines could be for those who don’t reach the goals.
The federal government is monitoring the situation and working hard to reduce the need for affordable housing around Canada. They are negotiating with cities and getting federal funds into the Housing Accelerator Fund. Policy changes on several levels, including the municipal level, are being pushed forward.