Ban on foreign buyers not a bullseye!

Zoltan PadarUncategorized

mortgage matters

Before the finalization of the regulations, CAPL urged the government to reconsider the definition of “acquire” so that mortgage lending entities with 3% or more foreign ownership, which gain possession, control, or right of the property through the enforcement of their mortgage security when borrowers default, are not captured by the prohibition. The good news is that we were successful on this front, and the final regulations were modified so that acquiring property through the enforcement of security is not considered to be “acquiring property”: the Federal Government advised that “Regulations contain a streamlined definition of “purchase” and its associated exceptions, including to avoid disruption to the established rights of creditors and the provision of housing finance.”

Not all Property is Captured

(a) population and classification of property – there is a complex definition of property captured in the ban, which relies on the Census Canada definitions of Census metropolitan (over 100,000 in population with 50,000 in a core) and Census agglomeration areas (over 10,000 in people). However, it is necessary to consult a map or list to determine how a particular area is classified, as some communities which exceed those population levels are not classified under these definitions. You can view a listing and map of Canada with classifications at this link Note on the map, all green areas are not subject to the ban, while orange areas are.

(b) mixed-use or residential property – commercial property and rental buildings with more than 3 units are excluded from the prohibition. Residential property, including mixed-use and undeveloped mixed-use or residential property, is subject to the ban.

What is a foreign corporation? 

Canadian corporations with 3% or more control or ownership by foreign individuals are considered foreign and subject to the ban.

Who is subject to the ban? 

Temporary foreign residents, including workers and students, are exempt from the ban as they satisfy some rather onerous criteria. 

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