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Information about Prohibition on the Purchase of Residential Property by Non-Canadians Act
- In addition to the Certificate and Consent of Purchaser – Individual, the Canadian Real Estate Association (CREA) has developed the Certificate and Consent of Purchaser – Corporation or other Entity to assist your members in legal compliance with the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
- These resources can be used in conjunction with other due diligence practices. If REALTORS® choose to use the relevant certificate, it should be completed before assisting or advising a potential purchaser. Both certificates are also now available on CREA WEBForms®.
- REALTORS® have an obligation to Know Your Client pursuant to the FINTRAC Regime. This includes identifying clients and recording certain information. One key difference is that under the FINTRAC Regime you may identify your client at the time of the transaction, whereas pursuant to this law, REALTORS® should ID clients before assisting or advising them on the purchase of a property.
- Another difference is FINTRAC beneficial ownership obligations require REALTORS® to identify any individual who owns 25% or more of a corporation/entity, whereas this law requires REALTORS® to determine substantially all owners or those who may control the corporation/entity to assess their status as non-Canadians.
- As real estate is provincially regulated, REALTORS® should ensure they comply with any guidance provided by their provincial regulator, board, and association.
- To download CREA’s certificates, and learn more about the Regulations we have added additional resources to member.CREA.ca.
Update on identifying if a property location is excluded from the prohibition
- According to the Regulations, properties located outside of either Census Metropolitan Areas (CMAs) or Census Agglomerations (CAs) are excluded from the prohibition.
- Statistics Canada’s list of CMAs and CAs can be found here, where a thorough list is available under the Data section at bottom of that page which highlights the 160 CMAs and CAs across Canada.
- An interactive mapping tool has also been created to assist individuals who have been reaching out to Statistics Canada.
Update from the RAE & Industry Partner Event
We wanted to provided a short update about the two questions that were raised by Members at the RAE & Industry Partner Event. CREA has provided more information below for the two situations.
Please keep in mind that this is not legal advice. All REALTORS® and their clients should really consult with a lawyer on their specific situation.
Situation 1: Ph.D. candidates/students with multi-year visas looking to buy as opposed to rent
Temporary residents studying in Canada, would qualify for an exception and be able to purchase a home, if they:
- are enrolled in a program of authorized study at a designated learning institution as defined in the Immigration and Refugee Protection Regulations, and
- have filed income tax returns for each of the 5 taxation years preceding the year in which the purchase was made, and
- have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made, and
- have not previously purchased a residential property in Canada while the prohibition is in effect, and
- purchase a property for a price not exceeding $500,000
Situation 2: The number of residents in a municipality as a possible loophole (he mentioned something about areas with populations of less than 10,000 residents)
That is not really a loophole, it’s just a different way of interpreting the law. The Regulations include an exception for any residential property found outside of a Census Metropolitan Area (CMA) or Census Agglomeration (CA) as identified in Statistics Canada’s Standard Geographical Classification 2021. Both CMAs and CAs are formed by 1 or more adjacent municipalities centered on a population centre, or the core. A CMA must have a total population of at least 100,000 of which 50,000 or more must live in the core and a CA must have a core population of at least 10,000. So yes, areas with less than a core population of 10,000 could be exempt.
Statistics Canada provides definitions of Census Metropolitan Area (CMA) and Census Agglomeration (CA). Members are able to determine if an area is in a CMA or CA by using Statistics Canada Standard Geographical Classification (SGC) reference maps. They can enter the location, place name or postal code on this website to determine if their client or particular property is in a CMA or CA.
Request for information
CREA has spoken with many boards and associations across the country about the new regulations. They would like to continue to hear from you about the impact of this legislation on REALTORS® and their clients. If you have a story from your region of how a REALTOR® or a potential foreign buyer has been negatively impacted by the prohibition, please let them know by sharing at support@CREA.ca. It’s important CREA understands the impact this prohibition has on members as they continue to make representations to the government.
The guidance above is for information purposes and is not legal advice or a substitute for legal counsel.
