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Canada Plans To Ban Foreign Buyers From Purchasing Homes For 2 Years

To try to give Canadians more opportunity to buy property.

Contributing Writer
Condo towers in downtown Montreal.

Condo towers in downtown Montreal.

Canada plans to ban non-resident foreigners from buying residential property for two years — a move aimed at tackling an out-of-control housing market.

Federal Finance Minister Chrystia Freeland made the announcement while unveiling the 2022 federal budget Thursday afternoon.

"We will make the market fairer for Canadians," she said in the budget presentation. "We will prevent foreign investors from parking their money in Canada by buying up homes. We will make sure that houses are being used as homes for Canadians rather than as a speculative financial asset."

The ban will prevent "commercial enterprises and people who are not Canadian citizens or permanent residents" from buying residential property, states a news release.

Freeland cautioned, however, that this and other measures in the budget proposal won't by themselves fix the housing market.

"There is no one silver bullet which will immediately once and forever make every Canadian a homeowner in the neighbourhood where they want to live," she said. "As a growing Canada becomes more and more prosperous, we will need to continue to invest year after year in building more homes for a growing country."

Freeland's announcement is not out of left field. She is making good on a campaign promise Prime Minister Justin Trudeau made in August when he pledged to ban non-resident buyers if the Liberals were re-elected. It's all part of the Liberal Party's multi-billion housing plan, which includes other measures intended to address the country's ongoing affordability crisis.

"Over the next 10 years, we will double the number of new homes we build," said Freeland.

The housing plan includes a Tax-Free First Home Savings incentive that will allow homebuyers under 40 to save up to $40,000 for their first home, a $4 billion New Housing Accelerator Fund to help fast-track the construction of new properties and $1.5 billion to build more affordable housing.

In addition, property flippers — whose actions mess with the housing supply, which drives up prices — are being slapped with higher taxes if they choose to sell a property they've owned for less than a year.

Unless you've been living in a van down by the river, you've probably noticed the homeowning dreams of most Montreal millennials are deader than a doornail.

An August 2021 report showed you would need a six-figure income to afford the average Montreal home, and the affordability crisis has not improved since then.

Recent figures from the Quebec Professional Association of Real Estate Brokers indicate the median price for a single-family home in Montreal soared 20% from February last year to $550,000 while the median price across the province was $422,000.

The median prices for multiplexes and condos both increased by 16% to $765,000 and $395,000, respectively.

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