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A Guide for Non-Residents on the Foreign Buyers Ban in Canada

A Guide for Non-Residents on the Foreign Buyers Ban in Canada

If you are a new immigrant to British Columbia and want to avoid violating any laws or paying massive taxes, this guide is for you.

The foreign buyers ban was introduced in 2023 to keep real estate prices lower by reducing demand from foreign buyers. This ban, designed to be temporary, aims to make housing more affordable for Canadian residents. Notably, there have already been revisions to the ban. In March 2023, it was updated to allow certain foreign buyers, such as those with work permits or foreign investors involved in housing development, some flexibility in purchasing property.

Exceptions to the Ban: Who Qualifies and How?

Several exceptions allow non-residents to purchase property in Canada:

  • Work Permit Holders: If you have a valid work permit with at least 183 days remaining, you can buy a house.

  • Foreign Investors: Investors looking to develop land to help with the housing supply can purchase property, provided foreign ownership in the investment fund is less than 10%.

  • Spouses and Students: Spouses without work permits or PR can be included in the title if their partner is a citizen or PR. Temporary residents, such as students, may also have exceptions.

Navigating the Foreign Buyers Tax: Provincial Regulations Unveiled

In addition to the ban, British Columbia imposes a foreign buyers tax, known as the Additional Property Transfer Tax, which is 20% of the property value. This tax applies even if you are a temporary resident or hold a work permit, unlike the federal ban, which may have more exceptions.

If you cannot avoid the foreign buyers tax, consider these strategies:

  • Consult a Lawyer: Legal advice can help find exceptions or methods to minimize tax liability.

  • Pay and Refund Strategy: You can pay the tax upfront and apply for a refund within a year if you gain PR or citizenship and make the property your primary residence.

Exploring Investment Opportunities Without a PR

There are still viable investment opportunities for non-residents:

  • Rural Investments: Some rural areas are not subject to the ban or high taxes, offering investment potential.

  • Commercial Properties: Investing in commercial real estate can bypass some residential property restrictions.

Staying informed about changes in the foreign buyers ban and provincial taxes is crucial. Working with experienced professionals can help you navigate these regulations and make informed decisions. Canada offers numerous opportunities for new immigrants, and with the right preparation, you can maximize your investments and enjoy a fulfilling life in this beautiful country.

THE BOTTOM LINE

By equipping yourself with comprehensive knowledge of the foreign buyers ban and the BC foreign buyers tax, and leveraging the resources and expertise offered by Level Up Mortgages, newcomers to Canada can successfully navigate the mortgage approval process and secure their ideal property. Understanding these regulations and identifying alternative solutions will pave the way for a prosperous future in the Canadian real estate market.

Level Up Mortgages is a mortgage broker team focused on helping the self-employed, new immigrants, non-residents, and investors access the best rates and alternative lending in Canada. We have been nominated for the Best Up and Coming Broker in Canada in 2021 and have been featured on CTV News and various publications due to our education-first approach. Our mission is to help you always stay a step ahead in the process.

See What You Qualify For Or Contact Paul To Get Your Pre-Approval.

Paul Davidescu (www.levelupmortgages.com)

  • Level Up Mortgages

  • 604-809-3188

  • paul(at)levelupmortgages.com

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Paul Davidescu