In a nutshell, the Act prohibits "non-Canadians" from purchasing any residential property across Canada in population centres greater than 10,000 people for the next 2 years which means from January 1, 2023 to December 31, 2024. 

First of all, let’s look at what it means when it says “non-Canadian”.  A non-Canadian is someone who is not a Canadian citizen, obviously, however that definition does not include those who are registered Indians under the Indian Act, or those who are permanent residents.  The point of this is it’s not about residency, it is about citizenship.  It’s ok if you’re a non-resident for tax purposes, as long as you’re a Canadian citizen, you can still buy property in Canada no problem. 

You also can’t be a non-Canadian corporation, now this is only for private companies not public, a non-Canadian corporation means your corporation is not incorporated under the laws of Canada or a province, or is controlled by a non-Canadian.  And the foreign ownership cannot be more than 3% - that is extremely low. 

As usual, there are exemptions, 4 of them, and these 4 exemptions are limited to: 

1. Temporary resident (student and work permits) who ALSO satisfy prescribed conditions set out in the regs

2. Certain refugees and dignitaries
3. Spouse or common law partner of a person who is eligible to purchase (spouse = 1 year living together)
4. Person assumed liability under a CPS before January 1, 2023 (no more assignments)

Also non-Canadians can still purchase if they acquired the property through:  

1. Death, divorce, separation or a gift;
2. Renting a dwelling unit for the purpose of its occupation by the tenant;
3. A transfer under the terms of a trust that was created prior to January 1, 2023;
4. A transfer resulting from the Non-Canadian exercising their right to the property as part of a security interest (example Non-Canadian could foreclose on a mortgage on a property).

Temporary Residents with work permits can purchase IF they meet these criteria:

1. they worked in Canada on Full-time for a minimum of three years within the four years preceding the purchase
2. they filed all required income tax returnsfor a minimum of three of the four taxation years preceding the year in which the purchase was made
3. they have not previously purchaseda residential property while the prohibition is in effect

International students can still purchase IF:

1. they are enrolled in an authorized program
2. they filed all required income tax returns for each of the five taxation years preceding the year in which the purchase was made
3. they were physically present in Canada for a minimum of 244 days in each of the five calendar years preceding the year in which the purchase was made
4. the purchase price of the residential property does not exceed $500,000
5. they have not previously purchased a residential property while the prohibitions is in effect

The Definition of ‘Purchase’ in the act is: when you enter into an offer to purchase whether or not there are conditions on the offer.  It’s not when the deal closes, it’s when it’s accepted,  and that includes leases with options to purchase and it includes a purchase through someone else, a nominee, so sorry - all those loopholes there are closed. 

Let’s now look at the Definition of Residential property, as this legislation only covers residential properties by the way - not commercial. 

Residential property means it is real property, it is immovable, and it's a detached house or similar building containing no more than three dwelling units. So a building with four or more units is no longer residential. That's a commercial building. So you can buy more than four units or more. A dwelling unit is defined as a residential unit that contains private kitchen facilities, a private bath and a private living area. It's a part of a building that is a semidetached house, row house unit, residential condominium unit or other similar premises that is intended to be owned apart from any other unit in the building. It can be raw land that does not contain any habitable dwelling that is zoned for residential or mixed use in a census metropolitan area or census Agglomeration, which we'll talk about in a minute

Next - how do we know WHERE is included, it all depends on the Census areas.

There are maps available showing the areas affected, here is a map of The north Okanagan, Vernon is squarely inside the boundary however Armstrong is not.  Salmon Arm, pretty much all in,  Kamloops, the same, Kelowna is in however Big White is out, which is interesting, Sun Peaks and Silver Star are in, Big white is out.  Here is Penticton, you can see here that most of Penticton is in however Summerland is not and neither is some of the Naramata bench, part is in, part is out.  Don’t’ ask me why. 

Ok so all this about the ban - what happens if it happens, what happens if a non-Canadian buys a property or i guess enters into an agreement to buy a property within the next 2 years.  Well, they aren’t messing around, it’s serious stuff.  First of all, it’s a crime, it’s a crime to buy as a non-Canadian and it’s also a crime to aid a non-Canadian to buy.  So what happens, well there’s an up to $10,000 in fines and the courts may order the property to be sold and the non-Canadian cannot recover more from the property than what was paid for it, whether the price went up or not.  Who can be fined, well, the Non-Canadian, anyone who knowingly aided in the purchase, and in the case of a corporation, it could be all the officers, directors, senior officials.

If you want to talk to us about Vernon real estate feel free to call us at 250-549-SALT (7258), text us at 250-309-9586 or email us at webinfo@saltfowler.com.