Federal Government Releases Regulations on Prohibition
on the Purchase of Residential Property by Non-Canadians Act

On Wednesday, December 21, 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.

The Canadian Real Estate Association (CREA) is extremely disappointed by the government’s decision to move forward with this legislation and the rollout of its regulations. Parliamentarians that supported the introduction of this measure need to recognize it will have a detrimental impact on Canada’s reputation, labour market, economy and severely hinder our ability to attract global talent. Our CEO Michael Bourque recently spoke at the Senate Committee on National Finance where he stated why CREA believes this piece of legislation does not address the core of Canada’s housing crisis.

How can REALTORS® reduce risk?

The regulations clarify that an order requiring the Residential Property be sold may be sought provided 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.

CREA recognizes 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.”

Despite record keeping not being a mandatory obligation, CREA recommends REALTORS® perform due diligence. To better assist REALTORS® with risk mitigation, CREA has developed a certificate entitled Certification and Consent of Purchaser.

With limited information available on how this law and its regulations will be interpreted and enforced, please be aware the certificate is a risk mitigation tool to try and 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.

As you are aware, REALTORS® already have an obligation to Know Your Client pursuant to the FINTRAC Regime. This includes ID’ing clients and recording certain information. The key difference is that under the FINTRAC Regime 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.

As real estate is provincially regulated, REALTORS® should ensure they comply with any guidance provided by their provincial regulator, board, and association.

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 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.

What are some of the 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 (CA) or Census Metropolitan Area (CMA) 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 provided above is not a substitute for obtaining legal advice. REALTORS® should consult legal counsel should they have any questions or concerns regarding this legislation.