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Buying property is not like any other purchase you make. Real estate in Canada has its own laws on both federal and provincial levels because of the amount of money involved and the societal implications.
Many Canadian cities are experiencing a housing crisis, where a limited supply of homes is driving up prices to the point families can’t find an affordable place to live. Let’s look at a few of the laws that cities created in response.
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Foreign Buyer Ban
On January 1, 2023, a new law came into effect across the country prohibiting anyone who isn’t a Canadian citizen or permanent resident (and foreign corporations, too) from buying property for two years. Formally known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, the stated purpose is to make housing more available to locals by preventing people who don’t live here from buying them.
The government closed some loopholes regarding real estate trusts buying properties, directly or indirectly. However, there are some exceptions.
The ban excludes non-Canadians who end up with an interest in a property due to separation, divorce, or death. It also excludes property a tenant rents. It also doesn’t apply to non-residents married to Canadian citizens, diplomats, refugees, and international students who have spent most of the last five years in the country.
It’s unclear whether the ban will achieve its stated aim; only 6% of homes in major Canadian cities like Toronto or Vancouver were owned by foreigners. It will likely take a few years to determine whether this measure has succeeded.
Reforming Ontario’s Municipal Zoning
The Ontario government has pledged to overhaul local zoning laws in cities to allow for more units per home with less red tape. The plan is to allow up to three units per residential lot without requiring bylaw amendments or municipal permissions.
Previously, homeowners weren’t allowed to renovate their property to create multiple units for tenants without a time-consuming application process.
The government is also waiving or dramatically reducing development charges that pay for city infrastructure, claiming this will reduce the cost of housing. We’ll see whether developers pass along these savings to buyers.
Undoing Greenbelt Protections
The Doug Ford government is also attempting to undo environmental protections for a vast swathe of sensitive wetlands surrounding the GTA known as the “greenbelt.” The conservatives claim freeing up this land will create more affordable housing.
There’s no reason why that particular land is more affordable, given all the unused or underused land closer to major city center’s. Also, the OPP is investigating whether the government tipped off private buyers before changing the law, as several conservative donors purchased valuable tracts of land just months before the law changed.
How Consumers Adapt
Homebuyers work hard to save money for their home. They don’t have time to keep up with changing laws. The digital innovator Regan McGee created Nobul to pair homebuyers and sellers with the right agent.
McGee summarized another way governments have attempted to empower individual homebuyers: “Antitrust laws have been applied against organized real estate 11 times and have been successful every time.”
When you use disruptive real estate technology to find a great realtor who delivers your needs and fits your budget, you can effortlessly stay on the right side of the law and find a great home.
