As of Jan. 1, there is a restriction on foreign home buyers, except for temporary visa holders meeting certain requirements.
To make housing more accessible to Canadians, the government is implementing a two-year prohibition on some foreign home buyers, but one expert says it won’t have much of an impact on Newfoundland and Labrador.
Nicole Darbaz, founder and owner of the Darbaz Real Estate Group, says the restriction has little impact on the housing market, especially in Newfoundland, which only has a small proportion of foreign buyers.
“Newfoundland is much more of its own little micro market,” Darbaz said. “We’re [living on] an island, and real estate prices are not necessarily running away compared to other major cities such as Vancouver and Toronto. Newfoundland as a whole is not particularly attractive to the foreign buyers.”
According to a Statistics Canada’s study conducted in 2020, only 6.4 per cent of all housing purchases in St. John’s were from foreign buyers at that time.
Who is affected and who is exempt
Darbaz said this ban mainly affects two types of people: international students and other temporary visa holders.
The ban does not apply to Canadian citizens or permanent residents. Other home buyers are subject to a variety of rules.
This ban mainly affects newcomers in Canada. International students and foreign workers each have their own restrictions on purchases as a result of the ban. They are allowed to buy one property in Canada after living there for a specific number of years and indicating their wish to become permanent residents.
Workers who have worked in Canada for three out of four years prior to purchasing a house and have filed income tax returns for three of the four taxation years are exempt.
International students can buy only one property valued at less than $500,000 and must meet the following requirements:
- They have filed income tax returns for each of the five taxation years preceding the year of purchase
- They have been physically present in Canada for a minimum of 244 days in each of the five years to buy
Temporary residents, refugees, diplomats, consular employees and members of international organizations living in Canada are also eligible to own property under the prohibition.
Non-Canadian businesses such as offshore corporations and foreign-controlled Canadian entities will be restricted from purchasing property under the ban. International companies can no longer provide accommodations for their employees.
International students can no longer buy a home directly upon arrival in Canada.
Oluwafemi Tytler, a process engineering student at Memorial University, has been living here for two years.
“I can understand the [government’s] aim for this policy, [but] it definitely makes us more difficult to settle down,” he said.
The rules apply only to residential properties with three or fewer housing units. There are other exclusions for residential properties in less-populated areas. Recreational properties such as cottages, cabins and other vacation homes are excluded.
Non-Canadians or anyone assisting a non-Canadian such as realtors or lawyers in buying a home in violation of the restriction can face a conviction and a fine of up to $10,000. If a court finds that a non-Canadian has done this, it may order the sale of the house.
Since the prohibition is only a month old, Darbaz says we need more time to see its influence on the housing market.
About the Author
Clifton Tam is a student journalist studying at College of North Atlantic. He loves sharing stories related to our daily lives.