The act prevents non-Canadians and foreign corporations from buying residential property in Canada for two years. But what does “non-Canadian” mean in this context? The act defines non-Canadians as those who are not:
- Canadian citizens.
- Permanent residents of Canada.
- Persons registered under the Indian Act .
As for foreign corporations, non-Canadian corporations are defined as those that are:
- Privately held.
- Not listed on a stock exchange inside Canada.
- Controlled by someone who is considered a non-Canadian under the act.
A person or corporation understood to be non-Canadian can’t buy property, either directly or through trusts, partnerships or even similar entities.
When it comes to the particular control of a Canadian property, the regulations in the take action define “control” as, “direct or indirect ownership associated with shares or ownership interests of the company or entity representing 3% or more of the value of the equity in it, or carrying 3% or even more of its voting rights, or control in fact from the corporation or organization, whether directly or indirectly, through ownership, agreement or otherwise. ” In other words, non-Canadian participants in corporations cannot be majority shareholders.
Thankfully for those who may assume they are affected by the ban, there are some exceptions to the rules when this comes in order to owning Canadian property.
If a non-Canadian ends up with an interest in a residential property due to separation, death or the divorce, they are not really subject to the ban. They are also not subject to the particular ban when the transfer of the property is from exercising the interest or secured right simply by a secured creditor and also when the property will be being rented by a tenant.
There are furthermore other exceptions to the prohibit. Some people who are not technically citizens or permanent residents can still purchase property over the next two years. These exclusions include:
- Non-residents married to the citizen.
- Diplomats and members of international organizations that are living in Canada.
- Refugees and all those with temporary resident status.
- Workers who have worked and filed tax returns in Canada for three out of the particular four many years before buying house.
- International students who have spent most of the previous five yrs in the country (they can buy home up to $500, 000).