The federal government recently announced amendments to the accompanying Regulations that went into effect on March 27, 2023. The Act was passed last year in June and the regulations came into force at the beginning of this year.
So, what are the changes? First, work permit holders who have at least 183 days of validity remaining on their permit or work authorization can now purchase a residential property to live in while working in Canada. They are allowed to buy only one property, and the previous provisions on tax filings and work experience in Canada are no longer required.
Another change is that the prohibition on non-Canadians purchasing vacant land zoned for residential and mixed-use has been repealed. This means non-Canadians can now buy and develop this type of land for any purpose, including residential development.
There is also an exception for non-Canadians to purchase residential property for development. This extends to publicly traded entities formed under the laws of Canada or a province, and controlled by a non-Canadian.
Lastly, the control threshold for privately held corporations or entities formed under Canadian laws and controlled by a non-Canadian has increased from 3% to 10%. This aligns with the Underused Housing Tax Act's definition of a 'specified Canadian Corporation'.
So, how will these changes affect the Canadian housing market? Well, in many cities, there's still a supply and demand issue. We simply are not building enough homes for our growing population. These amendments are aimed at increasing land development opportunities, which is great news for entrepreneurial work permit holders who can now invest in land development.
Adding more housing supply is crucial to meet the demand and hopefully stabilize housing prices. However, adding more buyers to the market may also mean more competition. Right now, it's a buyers' market, but do you think increasing the number of potential buyers in the Canadian real estate market will change that?! It may not be enough of an increase to make a noticeable difference.
People always ask when is the best time to buy a house? Our answer is yesterday, but the second best time is today! Even though we are experiencing house prices dropping, they will rebound. How do we know for sure?! There is only so much land, and we cannot really make more of it (unless you count a man-made island in the UAE).
So, what does this mean for rent-to-own? As always, NOW is a great time to get into a home and lock in your future purchase price, whether you're a Canadian citizen, or a work permit holder. We can help you secure your home now, so that you are not left out or priced out of the housing market in the future!
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