You can’t buy real estate in Canada anymore

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Adrian Lang/Pexeks From January 1, foreigners cannot buy real estate in Canada. The rule, which will apply for two years, will not affect permanent residents of the country, with exceptions for foreign students, work permit holders and asylum seekers. A vacancy tax was also introduced. Justin Trudeau’s government hopes that these actions will stabilize real estate prices, which have soared in recent years. In Ottawa – the fourth largest city in Canada – from Sunday, foreigners buying real estate can be fined up to 10,000 Canadian dollars (about 6,900 euros). Moreover, any person or company that helps to carry out the transaction is also subject to a financial penalty, which can reach the same amount. The introduction of such a ban on foreigners was an election promise of the Liberal Party of Canada – Trudeau’s party – in the 2021 campaign. The initiative, which was approved by parliamentarians last June, adds Canada to the short list of countries with such restrictions. New Zealand introduced a similar measure in August 2018. Similarly, foreigners cannot buy property in the Finnish Åland Islands. Canadian Minister for Housing, Diversity and Inclusion, Ahmed Hussen, said in a December 21 statement: “Housing should not just be property. It is meant to be inhabited – it is a place where families can put down roots, create memories and build a life together. With this bill, we guarantee that housing will be owned by Canadians, for the benefit of all people living in Canada.” The Canadian government has also introduced other measures to ease the problem of rising property prices, which has been exacerbated especially during the pandemic, such as tax incentives for first home purchases and financial assistance for people struggling to pay their rent. Chrystia Freeland, Minister of Finance and Deputy Prime Minister of Canada, in a speech last April in the House of Representatives, said: “Our economy is made up of people, and these people need homes to live. Here’s the problem: Canada doesn’t have enough housing. We need more and we need them quickly.” The average house price in Canada increased by 44% between December 2019 and February 2022. – most in Vancouver and Toronto. However, the ban on buying real estate by foreigners has provoked a wave of criticism. Several experts doubt the real impact of this measure, emphasizing that people who do not live in Canada have little to do with the housing crisis. A Baker Insights Group report found that non-resident foreigners bought just 1 percent. properties sold in the country in 2020. While liberals and conservatives had no doubts about the ban, the New Democratic Party (a partner of the Trudeau government) approached the matter differently, according to which a special tax should be introduced instead of a ban for foreigners. Provinces such as British Columbia and Ontario have had a 20% tax for years. value from foreign transactions. According to representatives of the real estate sector, neither bans nor taxes will solve the problem of housing shortage, and foreign buyers do not pose a threat to Canadians. According to the construction sector, a government incentive program for developers is needed to combat supply shortages. After the Great Recession (2008), many European countries – e.g. Spain or Portugal – even encouraged the sale of houses to foreigners from the so-called golden visas. Currently, a reverse trend can be observed. This is the case in the Balearic Islands, which, faced with serious housing problems in some cities, especially Ibiza, have launched a debate on introducing a ban on the Canadian model – with the difference that in this region of Spain almost 40 percent. operations on the real estate market are carried out by foreigners.

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