If you feel concerned by these new measures, if you wish to complete a real estate purchase without having the appropriate status, here is what you need to know and do.
Who will be affected?
It will be prohibited for a non-Canadian to purchase, directly or indirectly, any residential property. This applies to both corporations and individuals who are considered non-Canadians.
A non-Canadian is defined as any individual other than a Canadian citizen, a person registered as an Indian under the Indian Act or a permanent resident.
There are some exceptions to the Act. These include a temporary resident who meets the prescribed conditions, a protected person, a non-Canadian purchasing residential real property with a spouse who is entitled to do the same.
What does this mean in practice?
Notwithstanding section 34 of the Citizenship Act, a non-Canadian is prohibited from purchasing, directly or indirectly, any residential property. The Act prohibits the use of corporations or other entities to make the purchase in order to avoid the application of the Act.
Residential real property is defined as real property located in Canada, which may be a single family home, a similar building or a portion of a building. The Act applies to “purchases”. The regulations will specify the scope of the term and what constitutes it, and will set out exceptions for particular types of real property and circumstances.
What are the risks of violating the Act?
A non-Canadian making an infringing purchase, as well as any person or entity who has advised, instigated, aided or abetted or attempted to advise, induce, aid or abet, is considering a maximum fine of 10,000 $. The Court will also have the power to force the sale of the property that is the subject of a contravention as well as to issue any order deemed appropriate.
With regard to the validity of the sale of the residential building, this will not be affected by a purchase in contravention of the Act.
For the duration of the Canadian prohibition, it is therefore recommended that any person who does not meet the criteria provided for by law obtain a Canadian immigration status allowing the acquisition of a residential property before concluding such a transaction and this, from January 1st, 2023.
The Exeo team remains available to discuss the tools available to you in terms of immigration status in Canada.