The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the "Act"), in force January 1, 2023 to January 1, 2025 (subject to any amendments), prohibits the purchase, directly or indirectly, of residential property by non-Canadians. (See our previous E-Brief item on the Act.) The Regulations to the Act, released in December, contain definitions, exceptions and further key clarifications to the Act.
If you are involved in a residential real estate transaction, familiarize yourself with the provisions contained in the Act and Regulations. Protect yourself by taking reasonable steps to inquire and determine whether a purchaser is a “non-Canadian,” document the purchaser’s evidence as to their residency status, and keep copies of the verification of identity documents and information that you relied on. Obtaining a statutory declaration may be one way to easily document your client’s evidence.
Be aware that an entity formed in Canada but with direct or indirect ownership of 3% or more of the value of equity or of the voting rights by a “non-Canadian” is subject to the Act. Click on the table below to review a summary of some of the key sections of the Act and Regulations. This should not be a substitute for reading the legislation.
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