On March 27, 2023, the Federal Government of Canada announced amendments to the Regulations accompanying the Prohibition on the Purchase of Residential Property by Non-Canadians Act (together “the Amended Regulations”) which come into force immediately. The Amended Regulations have been designed to enhance flexibility for newcomers to Canada and allow non-Canadians to purchase a residential property in specified circumstances.

This is an update to our post published on January 13, 2013, The Impact of Canada’s Two-Year Prohibition on Foreign Purchases of Residential Property on Foreign Workers and Global Mobility.

Expanded Exception for Foreign Workers

The Prohibition on the Purchase of Residential Property by Non-Canadians Act and its accompanying Regulations (together, “the Act”) which came into force on January 1, 2023, originally provided some narrow exceptions for foreign workers and foreign students to purchase residential property.

The Amended Regulations now allow a foreign worker to purchase residential property, as further defined in the Act, in Canada, if the foreign worker:

• holds a work permit or is otherwise legally authorized to work in Canada;
• has 183 days or more of validity remaining on their work permit or work authorization on the date of purchase; and
• has not purchased more than one residential property.

The Amended Regulations remove the previous requirements for the foreign worker to have worked in Canada full time (for at least 30 hours per week) for a period of at least 3 years in the last 4 years, in addition, to the requirement to file all required federal income tax returns for at least 3 years in the last 4 years.

The Amended Regulations will be in force through December 31, 2024. It is unknown at this time if the Act will be extended.

Foreign workers with work permits who plan to purchase homes (or those that intend to pursue permanent residence) and businesses that employ or recruit such foreign workers will welcome the enhanced exception now available. However, foreign workers and other stakeholders should be aware that there have been no amendments to the narrow exceptions to the Act provided for foreign students to purchase residential property. Care should also be exercised by foreign workers regarding the timing of any purchase of residential property to ensure the foreign worker can demonstrate the prescribed period (just over 6 months) left on their work permits and to ensure they are not relying on maintained status during a work permit renewal process, given current work permit processing times in Canada and associated delays.