Foreign homebuyer ban discouraging international athletes, executives from investing in Canada
Canada’s foreign homebuyer ban is discouraging non-Canadian athletes and executives from investing in the country, which is one reason for the current sluggish pace of luxury home sales in Toronto, according to Engel & Völkers Canada.
Toronto’s once-booming market for properties priced between $10 and $20 million has cooled significantly, with such homes now taking an average of 112 days to sell, compared to just 40 days a year ago. Engel & Völkers said the foreign homebuyer ban is a primary factor behind the shift, as those purchasers were traditionally the primary clientele for the lucrative market segment.
Ottawa last December unveiled the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which went into effect for two years starting Jan. 1, 2023. Any violation of the ban results in a fine of $10,000, although there are certain exceptions.
The primary objective behind the act was announced in the Liberal government’s Budget 2022 and summarized on its website. “As a temporary measure to help stabilize the housing market coming out of COVID-19, we will ban foreign money from purchasing a non-recreational, residential property in Canada for the next two years, unless this purchase is confirmed to be for future employment or immigration in the next two years,” the Liberal government said on its website.
“This will also allow us to work with provinces and municipalities to develop a framework to better regulate the role of foreign buyers in the Canadian housing market so that this money does not deter housing from being available for and used by Canadians.”
Shortly after the regulation came into effect, it underwent several amendments to provide exceptions to allow certain types of temporary
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