Luke Giffen
Danny McMullen

Raising a Glass to Prohibition

Amendments have been made to ease the restrictions against foreign home buying in Canada


Just months after the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) went into force, new amendments have been enacted to ease and cool off the lofty restrictions that were imposed. For some, these changes come as no surprise as the initial provisions of the Act had some severe consequences on the industry. At a first glance, the ambiguous language seemed to encompass more than what you’d think residential property entailed. Indeed, more than just the family bungalow, it also included “any developed or vacant land that does not contain a habitable dwelling, is zoned for residential or mixed-use, and is located within a census metropolitan area.”[1] As a result, this seems to have unintentionally (or intentionally) lumped in commercial real estate and vacant land that could be used for residential or mixed-use, in essence covering the entirety of Toronto’s downtown core.

Unfortunately, the prohibition had the immediate impact of slowing or outright cancelling many construction and development projects. As some noted, the Act hurt many real estate investment trusts, as some would have been restricted from purchasing property.[2] Couple these issues with rising interest rates and it’s no surprise that we’re seeing a near halt on all major developments around the province. In a time when the province desperately needs more (affordable) housing, it’s nice to see that some amendments have been made to the Act. So, what happened exactly?

The Amendments

On March 27, the Minister of Housing and Diversity and Inclusion, the Honourable Ahmed Hussen, announced that some amendments would be made to “enhance the flexibility of newcomers and businesses looking to add to Canada’s housing supply.”[3] The amendments came into force on the same day.

First, it was announced that those who hold a valid work permit or are authorized to work in Canada will now be able to purchase residential property. In order to rely on this amendment, the permit holder must have 183 days or more left on the permit. With the influx in immigration in Canada, this is a nice change to see. Still, the elephant in the room is the lack of homes for a suitable price (whether buying or renting) for Canadians across the country.

Thankfully, the other major amendments seem to address the elephant rearing its ugly head. Indeed, section 3(2) of the Act’s regulations has been repealed so the Act does not apply to vacant land zoned for residential and mixed use. Similarly, an exception has now been granted to allow non-Canadians to purchase residential property for the purpose of development.[4] It will be interesting to see whether these amendments will be enough to push developers and real estate investment trusts into development or if the high interest rates are still too prohibitive.

Overall, the changes are an interesting step back from the Act that went into force just a few months ago. By now allowing non-Canadians to purchase residential property for the purpose of development, I am left wondering what the point of the entire Act even was. When it came out, it was touted as a means of keeping housing out of international hands in hopes of supporting Canadians. In seeing the consequences and the back peddling, it is a bit curious. Perhaps we will just need to wait and see what the long-term goals of this Act truly are. As it stands, development might be back on the menu for the Canadian real estate market.


[1] REM Editorial Team, “The unintended consequences of Canada’s foreign homebuyer ban,” Mar 2, 2023,, accessed Mar 31, 2023.

[2] Ibid.

[3] “Amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act’s accompanying Regulations,” Mar 27, 2023,, accessed Mar 31, 2023.

[4] Ibid.