Federal Government Releases Regulations on Foreign Buyers Ban

In early 2022, the Government announced its intent to prohibit non-Canadians from purchasing residential property in Canada for a period of two years. This measure was previously included in the mandate letters of the Minister of Housing and Diversity and Inclusion, and the Minister of Finance, published in December 2021.

This past December, the federal government released the supporting regulations on the Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyers Ban) which includes definitions, exceptions, and enforcement elements to help individuals understand and comply with the law, which comes into force on January 1, 2023.

How REALTORS® Can Reduce Risk

The regulations specify that an order requiring the Residential Property to be sold may be sought if certain conditions are met, namely the Non-Canadian is the owner at the time the order is made, and notice requirements have been met. The Act provides any person knowingly assisting or attempting to assist a Non-Canadian in the purchase of a prohibited property may be subject to a summary conviction offence under the Criminal Code and a fine of up to $10,000.

The regulatory analysis states “the regulations do not impose information collection, processing or reporting requirements on Canadian professionals, nor do they impose requirements with respect to the completion of forms or other types of documentation.” Therefore, although record keeping is not a mandatory obligation, members are advised to perform due diligence. To better assist REALTORS® with risk mitigation, CREA has developed a certificate entitled Certification and Consent of Purchaser.

With limited information currently available on how this law and its regulations will be interpreted and enforced, members are advised that the certificate is a risk mitigation tool to help REALTORS® comply with the law.

The certificate should be completed before assisting or advising a potential purchaser, and it should be used in combination with other due diligence practices. Other due diligence practices may include reviewing and keeping a record of the purchaser’s valid and current identification (such as a passport) to determine the purchaser’s citizenship, residency, or exempt status.

REALTORS® already have an obligation to Know Your Client pursuant to FINTRAC requirements. This includes client identification through documentation and recording details. The key difference is that under the FINTRAC requirements, you may “ID” 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.

What is the Prohibition on the Purchase of Residential Property by Non-Canadians Act?

On June 23, 2022, Parliament passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act. Coming into force on Sunday, January 1, 2023, this Act:

  • Does not apply to Canadian citizens or permanent residents.
  • Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
  • Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
  • Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
  • Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.

Key Elements Covered in the Regulations


The regulations broadly define the term purchase to include the direct or indirect acquisition of a right or interest in Residential Property. The regulations then specifically exclude, among other things, acquisitions of interests resulting from transitional or life events such as death, divorce, separation, or a gift.

Application of Prohibition to Non-Canadian corporations and other entities The term Non-Canadian, as it relates to corporations and other entities, has been defined as:

  • an entity not formed pursuant to the laws of Canada or one of its provinces; and
  • an entity formed under Canada’s laws that has direct or indirect ownership by a Non-Canadian of 3% or more of the value of the entity’s equity or voting rights.

Excluded residential properties

Properties located outside of a Census Agglomeration or Census Metropolitan Area are excluded from this prohibition.


Exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. For further details, please consult the regulations and/or ensure the buyer who may fall into one of these exception groups seeks legal advice on their eligibility.

Additional guidance

Further to the information that has been provided in the regulations, Canada Mortgage and Housing Corporation (CMHC) has released additional information and FAQs with respect to the interpretation of the Act and regulations.

This guidance is not a substitute for obtaining legal advice. REALTORS® should consult legal counsel should you have any questions or concerns regarding this legislation.

Useful Links:

FINTRAC Know Your Client Requirements

Purchase of Residential Property by Non-Canadians Act

Census Agglomeration or Census Metropolitan Area List

CMHC Additional Information & FAQs

Form – Certification and Consent of Purchaser

BCREA – Canada’s Foreign Buyer Ban