A new Canadian law that bans foreigners from buying residential properties as investments came into effect on 1 January. It provides exceptions for home purchases by permanent residents who are not citizens, as well as international students, foreign workers and refugees. The measure, which will be in place for two years, is aimed at stabilizing Canada’s skyrocketing home prices.

Non-Canadians who violate the ban can be fined up to $10,000 and may be required to sell the property they purchased. Any individual or company involved with the home purchase may be fined the same amount.

Canadian Prime Minister Justin Trudeau promised to introduce the law while campaigning for re-election in 2021. It was passed by Parliament on 23 June 2022. Canada is now one of a few countries that bans foreigners from buying residential property as investments. New Zealand introduced a similar measure in 2018, while in Finland, foreigners need permission to buy real estate in the country.

The Canadian government has introduced other measures to curb rising home prices, such as tax incentives for first-time homebuyers, investment for the construction of new homes and monthly subsidies for people who are unable to find affordable rent. An anti-flipping tax also came into effect on 1 January. Under the law, anyone who sells a property which they owned for less than 12 months – a process known as flipping – will be taxed on the profits made from the deal.