Until 1 January 2027, most non-Canadians cannot buy residential property in Canadian cities. An entrepreneur holding a work permit is one of the exceptions, subject to two precise conditions. Here is what the federal statute and its regulations provide, along with the separate Quebec rule for farmland.
Who the ban applies to
The Prohibition on the Purchase of Residential Property by Non-Canadians Act applies first to people who are neither Canadian citizens nor permanent residents. It also applies to corporations.
- The foreign corporation: a corporation incorporated outside Canada.
- The privately held Canadian corporation: a Canadian corporation that is not listed on a stock exchange and is controlled by a non-Canadian.
- The control threshold: 10% or more of the value of the equity or of the voting rights, or control in fact (Regulations, ss. 1 and 2).
In other words, buying through your Quebec corporation does not get around the ban if you hold 10% or more of it.
Which properties are covered
The ban does not cover every property. Its reach depends on the type of property, where it is located and the purpose of the acquisition.
| Property | Covered by the ban | Source |
|---|---|---|
| Residential property in a census metropolitan area or a census agglomeration | Yes | Regulations, s. 3 |
| Residential property located outside those areas | No | Regulations, s. 3 |
| Purchase of residential property for the purpose of development | No, the purchase is exempt | Regulations, s. 4 |
| Vacant land zoned for residential or mixed use | No, since the 2023 amendments | CMHC |
| Commercial or industrial property used to operate the business | No | Act |
The work permit exception
A work permit holder, or a person authorized to work without a permit, may buy despite the ban. Two conditions are added to that status, and the timing of the check matters as much as the conditions themselves.
The status
A valid work permit, or an authorization to work without a permit.
183 days
The authorization must still be valid for at least 183 days on the date of purchase.
One property only
The exception applies only if the buyer has purchased a single residential property.
When to check
The regulations treat the acquisition of an interest, with or without conditions, as a purchase.
As a precaution, we check the remaining validity of the permit as soon as the offer to purchase is accepted, not only at the signing of the deed of sale.
For an entrepreneur, this exception usually opens with the work permit obtained through the notice of intention to select under stream 2 of the Entrepreneur Program. The length of that permit therefore becomes part of real estate planning.
The other exceptions
Two further exceptions exist. The first is rarely useful to an entrepreneur, and the second does not depend on a purchase.
- Students: the exception requires five years of income tax filings, at least 244 days of presence in each of those five years and a price of no more than $500,000.
- Transfers: those resulting from a death, a divorce, a separation or a gift.
These exceptions come from sections 4 and 5 of the Regulations.
Penalties
A non-Canadian who buys in contravention of the Act, and anyone who knowingly assists or counsels that purchase, is liable to a fine. A court may also order the property to be sold (Regulations, s. 7).
Business property and the real estate trap
A commercial or industrial property bought to operate your business is not residential property within the meaning of the Act. The ban does not apply to it.
The opposite mistake also happens: assuming that a rental property can be the business behind the immigration project. The Entrepreneur Program and the Self-Employed Worker Program exclude trading, leasing, brokerage, development and land development in the real estate field. We set that limit out in our piece on the ineligible sectors of the Entrepreneur Program.
How long the ban lasts
In February 2024, the federal government extended the ban until 1 January 2027. We will update this article as soon as the government announces the rules that will apply after that date.
Farmland: a separate Quebec rule
Separately from the federal ban, the Act respecting the acquisition of farm land by non-residents requires a person who does not reside in Quebec to obtain authorization from the Commission de protection du territoire agricole du Québec.
To be considered as residing in Quebec for the purposes of that Act, a person must in particular have stayed in Quebec for at least 1,095 days during the 48 months preceding the acquisition. A farm business project must therefore build that authorization in from the start.
How MEKA AVOCAT works on this
Before any offer to purchase, we check your status and the length of your permit, the nature of the property, its location and the purchase structure you have in mind, then we work with your notary and your lender. If the purchase is not permitted today, we say so and we help you plan the right time.
Texts and sources
This article draws on the Prohibition on the Purchase of Residential Property by Non-Canadians Act and its regulations (SOR/2022-250), on the extension announced by Finance Canada in 2024, on the Canada Mortgage and Housing Corporation guidance regarding the 2023 amendments, on the Act respecting the acquisition of farm land by non-residents as amended in 2013, and on the Québec.ca page describing stream 2 of the Entrepreneur Program.
Frequently asked questions
Does the type of work permit matter?
The regulations cover the holder of a work permit or a person authorized to work without a permit. What matters is the remaining validity of at least 183 days and the limit of a single residential property.
Can I buy a home through my Quebec corporation?
No, if you hold 10% or more of it or control it in fact: the corporation is then itself covered by the ban.
Can I buy a house outside the major cities?
Yes, if it is located outside a census metropolitan area or a census agglomeration, since the ban does not apply there.
How long does the ban last?
Until 1 January 2027, following the extension announced in February 2024. The rules that will apply after that date have not been announced.
Considering a home purchase during your immigration process?
The check is done before the offer to purchase, not the day before signing at the notary’s office. A meeting lets us confirm your status, the remaining validity of your permit, the nature of the property and the purchase structure you have in mind.
Next: the Start a business stream, the ineligible sectors of the Entrepreneur Program, and our work on starting a business in Quebec.
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Lawyer, member of the Barreau du Québec since 2014, founder of MEKA AVOCAT. This text sets out general legal information: it describes rules that apply broadly, not the answer to a particular case, and does not replace advice on your own situation.
