Changes to Foreign-Buyer Residential Rules

Summary#

These are final changes to the Regulations Amending the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations: SOR/2023-66. The amendments make it easier for some non-Canadians and non-Canadian-controlled companies to buy land or property for development, and they loosen some rules for temporary workers who want to buy a home. The changes were registered on March 27, 2023 and published in the Gazette on April 12, 2023.

What it does#

• Raises the foreign “control” test from 3% to 10% — a company is only treated as controlled by a non‑Canadian if non‑Canadians hold 10% or more of its value or voting rights.
• Removes vacant land from the definition of “residential property,” meaning non‑Canadians can buy vacant land (for any lawful use, including building homes), subject to local rules.
• Adds an explicit exception so non‑Canadians can buy residential property if the purchase is for the purpose of development (commercial, industrial, residential, or mixed).
• Expands the temporary-worker exception so more temporary residents can buy one home:
  • the buyer must have 183 days or more left on their work permit or authorization at the time of purchase, and
  • they must not have already purchased more than one residential property.
  • The previous requirement for full‑time work status and a tax‑filing test is removed.
• Clarifies that publicly traded entities formed under Canadian law (for example, REITs or limited partnerships) can qualify for exceptions similar to other publicly traded companies.

Note: these amendments are to the rules created under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which itself is a temporary measure in effect for two years from January 1, 2023.

Who's affected#

• Temporary foreign workers and other temporary residents who want to buy a home while working in Canada.
• Developers and companies (including foreign‑owned ones) involved in buying land and redeveloping properties.
• Publicly traded real‑estate entities formed under Canadian law (for example, some REITs or partnerships).
• Canadian employers who recruit foreign workers and professionals.
• Real‑estate agents, lenders, and local governments that deal with land use and development.

If you are unsure whether a specific buyer or company is affected, the rules can be technical — the changes aim to make some of those situations simpler to evaluate.

Why it matters#

• It removes barriers that were stopping some development projects. Allowing non‑Canadians and foreign‑linked companies to buy vacant land and property for development can speed up building new homes.
• It helps employers attract and retain skilled temporary workers by letting more of them buy a home sooner after arriving in Canada.
• It simplifies a few technical tests (like the control threshold), which should reduce confusion for businesses and professionals who advise buyers.
• These are targeted relaxations; the overall ban on most non‑Canadians buying residential property remains in place under the Act, which is temporary for two years (from January 1, 2023).