In an effort to combat rising real estate values, the Canadian government has instituted a ban on foreign purchases of property within the country.

The law, which was passed following the onset of the Covid-19 pandemic and took effect on Sunday, January 1, 2023, is only expected to be in place for a two-year period.

The decision to implement the ban was reportedly driven by concerns that foreign buyers were contributing to a supply shortage and driving up property prices through investment purchases.

According to Canadian Prime Minister Justin Trudeau and the Liberal Party, Canadian homes have become attractive to profiteers, powerful corporations, and international investors.

In late December, Ottawa clarified that the ban would only apply to city residences, and not to recreational properties such as summer cottages.

During the 2021 election campaign, Trudeau and the Liberal Party promised to address the issue of unaffordable housing, which had become a major concern as home ownership became increasingly out of reach for many Canadians due to skyrocketing prices.

In response, they introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act. The campaign website stated that this measure was necessary due to the issue of underutilized and unoccupied housing, speculation, and rising prices.

In addition to the national ban, major cities like Vancouver and Toronto have also implemented levies on non-resident and vacant properties. However, a legal exception has been made for Canadian immigrants and permanent residents who are not yet citizens.

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