The government is walking back some restrictions on foreigners purchasing residential property just months after the new rules came into force.
Non-Canadians in the country on a work permit or who are authorized to work in Canada can now purchase residential property. They must have at least 183 days or more remaining on their work permit or work authorization and must purchase only one property to be eligible.
Non-Canadians and foreign businesses can now also purchase residential property if they intend to develop it, and can purchase vacant land zoned for residential or mixed use for any purpose.
Parliament passed the law restricting non-Canadians from purchasing property, the Prohibition on the Purchase of Residential Property by Non-Canadians Act, in June 2022. The law went into force at the start of this year, and prevents non-Canadians from buying residential property in Canada for two years. The restrictions were part of a Liberal promise made during the 2021 federal election campaign amid rising home prices.
Ahmed Hussen, the minister of housing and diversity and inclusion, announced the changes Monday. A news release from the Canadian Mortgage and Housing Corporation (CMHC) said the changes went into effect immediately.
"These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities," Hussen said in the news release.
"These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors."
CRA waives late penalty on new housing tax
The changes came on the same day the Canada Revenue Agency (CRA) waived late fees and interest on the Underused Housing Tax (UHT), which also came into effect on Jan. 1. The tax requires non-resident, non-Canadians to pay one per cent of the value of any vacant or underused property in Canada yearly. There are several exemptions to the UHT, including an exception for seasonal properties.
The CRA said in a news release it was waiving the penalties because it "understands that there are unique challenges for affected owners in the first year" of the tax.
Those affected by the tax will now have until Oct. 31 to file UHT returns and payments without penalty.