The Canadian Government’s 2022 Budget proposes a two-year ban on residential property purchases by foreign companies and individuals who are not Canadian citizens or permanent residents. The proposal is an attempt to try and counter the impact that foreign investment has had on the increasing costs in the Canadian housing market. There are a number of exemptions including, refugees, foreign workers and international students on a path to permanent residency.
The Government also proposes to enact Bill C-8 the Underused Housing Tax Act and implement a tax on residential properties owned by foreigners that are being underused. Under this tax, residential property owners who are non-Canadian and non resident and who are leaving their properties underused or vacant would be subject to an annual tax of 1 % of the assessed value of the property or its most recent sale price, unless specifically exempt. There are many exemptions, the most common one being the “principal residence” exemption. If the legislation is passed, it will apply retroactively to January 1, 2022.