Realtors and Buyers Take Heed: The Prohibition on the Purchase of Residential Property by Non-Canadians Act

women holding a miniature house and the keys for it

Effective January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) and the connected regulations (the “Regulations”) prohibit non-Canadians from purchasing (either directly or indirectly) residential property in Canada for a period of two years.


  • The Act imposes a fine for people who violate the prohibition. Non-Canadians that violate the prohibition, or any person or entity that knowingly assist with a violation, can be fined up to $10,000.
  • Additionally, if a non-Canadian is convicted of violating the prohibition, a court or the Minister can order the sale of the residential property. Any ordered sale will result in the non-Canadian receiving no more than the price paid to purchase the residential property.
  • Finally, the Act also sets out that, if a corporation or entity commits an offense, officers, directors and other representatives of the corporation or entity can be a party to and liable for the offence.

Definition of Non-Canadian:

  • The prohibition applies to individuals who aren’t:
    • Canadian citizens;
    • Permanent Residents of Canada; or
    • Persons registered as an Indian under the Indian Act.
  • The prohibition also applies to corporations and entities that:
    • Are not incorporated under the laws of Canada or a province; or
    • Are incorporated under the laws of Canada or a province but are controlled by someone who is a non-Canadian (with control being set at 10% of the value of equity or voting rights).

Exceptions to the Prohibition:

  • The Act defines residential property as buildings of up to 3 dwelling units and parts of buildings, like semi-detached houses or condominium units. The Act doesn’t prohibit the purchase of larger, multi-unit buildings containing 4 or more dwelling units.
  • The Regulations include an exception for any residential property found outside of a Census Metropolitan Area (“CMA”) or Census Agglomeration (“CA”) as identified in Statistics Canada’s Standard Geographical Classification 2021. You can find out if a property is in a CMA or CA by entering the address of the property at:

  • Temporary residents working in Canada, if they:
    • Hold a valid work permit or are authorized to work in Canada;
    • Have 183 days or more of validity remaining on their work permit or work authorization at time of purchase; and
    • Have not previously purchased a residential property in Canada while the prohibition is in effect.
  • Temporary residents studying in Canada, if they:
    • Are enrolled in a program of authorized study at a designated learning institution;
    • Have filed income tax returns for each of the 5 taxation years preceding the year in which the purchase was made;
    • Have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made;
    • Have not previously purchased a residential property in Canada while the prohibition is in effect; and
    • Purchase a property for a price not exceeding $500,000
  • The Regulations provide an exception for non-Canadians purchasing residential property for purposes of development. Undertaking repairs, renovations or other similar modifications to an existing residential property generally does not rise to the level of what would constitute development.  According to the FAQs on the Canada Mortgage and Housing Corporation (“CMHC”) website, some non-exhaustive factors that may indicate that an alteration or improvement constitutes development include the following:
  • The alteration or improvement engages the applicable review and approval processes of the relevant municipality or other land use planning regulator; and
  • The alteration or improvement is accompanied by a change of use resulting in commercial, industrial, residential, retail, office, agricultural, resource extraction or other recognized and permitted land uses.
  • The prohibition does not apply to any entity formed under Canadian provincial or federal law and publicly traded on a stock exchange in Canada, including REITs.
  • The prohibition does not apply to vacant land.
  • The acquisition by an individual of an interest or a real right in a residential property resulting from death, divorce, separation, or a gift.

Please note that the above exceptions are not exhaustive but represent some of the more prevalent exceptions under the Act and the Regulations.

If you or your clients are Non-Canadians looking to buy residential property in Canada, we encourage you to reach out to our team of qualified real estate lawyers.

The information contained herein is for general guidance only and is not to be construed as legal or other professional advice.  It should not be used as a substitute for consultation with legal or other competent advisers.  Before making any decision or taking any action, you should consult a professional.

Stringam LLP and its lawyers are not responsible for any errors or omissions in connection with the use of this information.  All information on this site is provided “as is,” with no guarantee of completeness or accuracy.

Stringam LLP and its lawyers won’t be liable to you or anyone else for any decision made or action taken in reliance of the within information.

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