Canada

Canada Will Almost Certainly Ban Foreign Buyers, As Both Major Parties Promise

Foreign speculators looking to buy a home in Canada might encounter a few hiccups in the next few years. The country is in the middle of a snap election, and housing is the hot topic — especially foreign ownership. Just this morning, the ruling Liberal Party announced they would ban non-resident buyers. This is the same strategy the official opposition plans on implementing if elected.  In other words, both parties likely to lead will be banning non-resident ownership. At least for a while.

Canada’s Conservative Party Plans To Ban Non-Resident Buyers  

The Conservative Party of Canada (Conservatives) was the first to target foreign buyers. The party will ban non-residents from buying a home… at all. Not just a tax, but for two years the party plans to restrict foreign buyers. Not a lot of details on how this would work, or how it would be prevented. Though it is the first time an outright ban in the country has been proposed.

Canada’s Liberal Party Just Announced They Too Will Ban Foreign Buyers

The Liberal Party of Canada (Liberals) joined the bandwagon on foreign buying restrictions. The party, led by Prime Minister Justin Trudeau, promised a ban on foreign buying for a “trial.” The trial happens to be just as long as the Conservatives have proposed. It could have been implemented any time in the past 6 years they have been governing, but wasn’t. I’m sure they’re not copying anyone’s homework.

The Liberals also said they would go one step further when targeting non-residents. They plan on expanding the vacant home tax on non-resident buyers. This has yet to go into effect, but they already think it’s not enough. Weird, but okay.

The NDP Won’t Ban Foreign Buyers, But Will Tax Them

The much smaller NDP party hasn’t promised to ban foreign buyers, but they will tax the heck out of them. Non-resident home buyers would be hit with a 20% non-resident purchase tax. Currently, Ontario and BC both have similar taxes for highly populated, major regions. Both provinces currently only collect 15% in those regions, so it would be an additional cost. 

The Liberals or Conservatives will most likely be the leaders post-election. Both parties have a huge lead over the others, and both want a trial ban of foreign buyers. This makes it an all-but-done deal.

As for the NDP, their chances of winning the government are pretty slim at this point. They are very effective at punching above their weight though. If they do manage to capture a significant number of seats, the goal of higher non-resident taxes aligns with the Liberals. Any way you cut it, foreign buyers are about to see the welcome mat roll up.

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36 Comments

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  • Nassim 2 months ago

    Booming industry for students to own million-dollar homes in the middle of nowhere coming up.

    • iAmDmAn 2 months ago

      They need to ban foreign students from buying homes as well they can only rent. Because because yes you are right that is a loophole.

  • Bruno 2 months ago

    They plan on banning 1.5% of buyers? Sounds pretty useless.

    • Trader Jim 2 months ago

      Nah. They plan on announcing very loudly to foreign buyers that a ban is coming so they squeeze into the same window prices were starting to fall, and then say they fixed after they created a temporary surge. See Stephen’s take on Vancouver’s non-resident tax.

    • julia 2 months ago

      Yes, useless and mean !

  • iAmDmAn 2 months ago

    We’ll see the parties make a lot of promises pre-election just to get votes and never follow through with their promise or revise their original promise only execute part of it.

    • Van YIMBY 2 months ago

      I think if Trudeau makes one more promise to Millennials he doesn’t keep, he wipes the Liberal Party off of the voter map in future elections. Millennials are now the biggest voting block.

      Distrust will last a generation. After Paul Martin screwed over Boomers, Harper was in office for almost a decade. After he screwed over Gen X, Trudeau would have had a decade had he not called an early election. If they’re out, they’ll be crushed to dust.

      • Anthony Pelletier 2 months ago

        Interesting sentiment. Curious, what promises did Trudeau fall through on that would form your opinion that way?
        I ask because Polimeter has him at 5% broken promises thus far. Most of those are fiscal targets related to GDP/deficit/spending, which don’t seem to be hot topics for Millennials – myself included.
        I don’t particularly like Justin and I’m not defending him, just curious what I’ve missed over the last 10 years?

        • Anthony Pelletier 2 months ago

          Whoops meant 6 years.

        • Sharon Sommerville 2 months ago

          Trudeau broke two big promises from the 2015 election: to end our FPTP electoral system which many young people wanted & expected him to do and he promised to end government subsidizes of the fossil fuel industry. Then he over paid on an elderly pipe line.

  • Oakville Rob 2 months ago

    Honestly, who will people sell their houses to? If you kick the value of houses out from under Canadian homeowners, and HELOC headroom with it, how will people maintain their current lifestyles/cars/vacations/ig? People know their personal situations and they don’t talk about it when it’s bad. Seriously, some $M homeowners can’t buy food without a HELOC. It’s a terrible mess that wont be cleaned up with a new bunch of politicians. Trudeau (and Harper) may have the financial destruction of Canada tied to their legacies and you and me will pay for it.

    • Olivia 2 months ago

      This is the issue. If you have a government that’s hell bent on preserving home values, there’s almost zero chance of them actually falling through (or they’ll end it early),

      • iAmDmAn 2 months ago

        yep, they have stated they dont want house prices to drop and they will do what is necessary to keep them up. Even 10% drop is too much.

    • Van YIMBY 2 months ago

      Which is 100% the problem. Can’t buy a house 3 hours out of Toronto for less than $750k. The only buyer has to have a job outside of the country.

  • Sharon Sommerville 2 months ago

    40 years too late.

  • Sam Huang 2 months ago

    What about the local manipulators that own many condos and houses …

  • Jane Doe 2 months ago

    Does not change a thing. If anything, the demand is about to sky rocket with all the incentives.

    Why do we need to change anything? Honestly, Toronto and Vancouver are much better than NY or SF, however they are still cheaper. Properties in Asia are more expensive than Canada.

    Why are we all complaining? This is capitalism and rule of demand/supply are in effect.

  • Qwerty 2 months ago

    House prices really started to rise in 2015, what else happened in 2015. Now they want to make promises, after nothing has been for half a decade under JT’s watch. You know whatever they do will just make prices go up even more. How about they promise to stop sending out tons of cash and stop interfering with interest rates. A little thing called the free market would do wonders

  • expat 2 months ago

    So I have some skin in this game. I am an expat of 10 years and it’s always been our long term goal to repatriate back to Canada with our income made abroad. We’re nearing that goal post of the 35% we need to put down as non-residents, and then this comes along. We are lumped in with this foreign buyer/investor group because we’re non-residents. Yet we’ve been both working abroad to avoid debt and save money so we can make a home base in Canada.

    So should we be lumped in with these foreign money launderers? This election kind of sucks for us in any measure, when were were coming back in summer of 2022 to start looking to buy. I don’t think anyone has really looked at the finer details of our demographic, and now we’re wondering if we should just buy somewhere else.

    • Michael Westen 2 months ago

      >So should we be lumped in with these foreign money launderers?

      Yes. You are non-residents who have been working abroad who want to try and purchase a home in Canada. You made the decision to leave and become a non-resident. You may not be a money launderer per se, but you are in essence a foreigner who would like to buy in Canada (AKA foreign buyer).

      > I don’t think anyone has really looked at the finer details of our demographic, and now we’re wondering if we should just buy somewhere else.

      You absolutely should buy somewhere else. The goal of this policy is to encourage and foster domestic home ownership by restricting non-resident buying in general. There are many countries with better cost of living and similar quality of life standards to Canada.

      Bonne chance!

      • expat 2 months ago

        Had you considered the reason I left Canada ten years ago was because I couldn’t find employment? All of the savings my family has made in a decade, we want to spend in Canada. I have a family to raise and want to anchor in Canada.

        Once again, short sightedness rules.

        • Michael Westen 2 months ago

          >Had you considered the reason I left Canada ten years ago was because I couldn’t find employment?

          How is this my or anyone else’s concern? Once again, YOU made the decision to leave and become a non-resident.

          > I have a family to raise and want to anchor in Canada.
          If you’d like to move back and rent until you are a resident again as a foreigner, no one is stopping you. You are free to do whatever you wish as a foreigner seeking re-entry into Canada. If you wish to buy a home, the foreign buyer policies will apply to you as a non-resident.

          Sincerely,
          -An actual Canadian citizen

    • FTS 2 months ago

      If you have citizenship, and it sounds like you do, just move back and rent until you get resident status. Problem solved.

  • Letsgetreal 2 months ago

    Just again proves that neither party understands economics in the least. Did they ever wonder where these “foreign buyers” got the money to buy the properties in the first place.
    When you print endless amounts of money and create a consumer economy with only foreign suppliers, you end up with massive trade deficits. In simple terms, the foreigners get all our money and we get all that cheap stuff. Just to re-iterate, they get all our money. Well now it is there turn to go shopping and they don’t want clothes and knick-knacks, they want real hard assets like homes. And where can you spend Canadian dollars, you guessed it – in Canada. So abusive spending by our overlords, reckless money printing and massive trade imbalances is why house prices are shooting up and foreigners are coming to invest.

  • Nazrul Islam 2 months ago

    Banning of foreign buyer is a crying needs for the citizen of Canada. Otherwise, the citizen will need to live under the tree and foreigners will rule the housing market for their illegal money dumping business.
    So, the only way to protect the Canadian Citizen Ban them, time is running fast.

  • Neek 2 months ago

    To be honest we all know this is just a witch hunter. How many of you actually see foreigners owning the homes on your street? This is just an excuse to not implement REAL policy, which is taxing people and corporations that own multiple residential properties. Foreign buyers are some like 1.5% and mostly concentrated in high end real estate. Id they want real change go after people who own multiple residential properties.

    • iAmDmAn 2 months ago

      This is true, you have people owning 5, 10 homes, cottages, then renting them out at crazy prices. That’s all good but it means less homes on the market for those wanting to buy, which further increases prices. To put some of those homes back on the block they might just need to tax those investors a bit more unfortunately.

    • Oakville Rob 2 months ago

      Are you kidding me? It’s very real. I just left south east Oakville. There are many houses owned by people from other countries, many of those properties have been vacant since 2017, which has taken a significant toll on local stores, schools, and neighborhoods that have houses rotting away because of unrestricted land banking. It should be stopped.

    • Julia 2 months ago

      So true. I know so many Canadians who collect properties and speculate as well, which has nothing to do with foreign buyers but it’s so easy to blame them since they do not have the right to vote and cannot defend themselves ! Such a weak excuse for the lack of affordable housing. Funny that nobody is blaming a lack of infrastructure such as a high speed train that would make the commute time so much shorter and more enjoyable. Street cars in Toronto are a joke ! They stop every 20 meters, move way too slowly for such a big city and is clearly not appropriate. Yet, they have increased in quantities but not in speed which was basically useless and expensive !

  • Herbert Bourguignon 2 months ago

    10 years too late! But better late than never.
    They might want to deal with real estate money laundering at the very same time!
    The market will revert to the mean eventually, in spite of our central bankers addiction to cheap money and our incompetent political masters.

  • Scott 2 months ago

    Will they also ban foreigners from incorporating a business in Canada as well? There should be a ban on opaque ownership. If you do t want to declare yourself the beneficial owner, then you pay “Opacity Tax.” 20% of the value of the property (annually) to keep your name out of the public records…

  • Michael Westen 2 months ago

    Looking forward to seeing this promise be implemented! I can’t wait to vote in our new electoral system that is not first-past-the-post and go work my 15$ minimum wage job, while reading the news on how the final drinking water advisory on the reserves has just been removed. My child has just been implemented into the national child care program too!

  • Alex 2 months ago

    guys. are you serious? the conservatives tried to pass a motion to ban foreign ownership TWO MONTHS AGO and nearly all of the liberals, including Trudeau, voted against it.

  • Bertrand 2 months ago

    Haven’t seen any mention of a beneficial ownership registry or increased requirements to proof source of funds for purchases. Without any measures such as these it’ll be pretty easy to spin up a trust to avoid these bans.

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