The foreign buyer ban in British Columbia combines federal restrictions on foreign ownership with B.C.’s separate 20% foreign buyer tax. Together, these rules can affect whether a non-Canadian can purchase residential property in B.C. and how much tax they may have to pay.
The federal government introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Acton January 1, 2023. The ban was originally set to expire on January 1, 2025, but it was extended for another two years and is currently scheduled to remain in effect until January 1, 2027.
British Columbia also has an Additional Property Transfer Tax, commonly known as the foreign buyer tax. In certain areas of B.C., eligible foreign entities and taxable trustees who purchase residential property may be required to pay an additional 20% tax.
It is important to understand that the federal foreign buyer ban and B.C.’s foreign buyer tax are two separate rules. Being exempt from the federal purchase ban does not necessarily mean a buyer is exempt from B.C.’s 20% Additional Property Transfer Tax—and vice versa.
What Is the Foreign Buyer Ban?
The federal foreign buyer ban generally prohibits a non-Canadian from purchasing residential property in Canada.
Under the federal legislation, a non-Canadian generally includes an individual who is not:
- A Canadian citizen
- A permanent resident of Canada
- A person registered as an Indian under the Indian Act
The rules can also apply to certain privately held Canadian corporations and other entities that are controlled by non-Canadians.
The purpose of the legislation is to restrict foreign investment in residential housing and help ensure that homes are available to people living and settling in Canada.
Does the Foreign Buyer Ban Apply to Every Property in British Columbia?
No. The federal foreign buyer ban does not apply to every residential property in British Columbia. There are important exceptions based on the property’s location, type and the buyer’s circumstances.
CMHC Foreign Buyer Ban Interactive Map
Residential properties located outside a Census Metropolitan Area (CMA) or Census Agglomeration (CA) are generally excluded from the federal prohibition. This means that simply being located in B.C. does not automatically prevent a non-Canadian from purchasing a property.
Statistics Canada — CMA and CA Definitions
Who May Qualify for an exemption?
Depending on their circumstances, the following buyers or transactions may qualify for an exemption:
- Temporary residents who meet the federal requirements for work permit holders or other qualifying workers
- International students who satisfy the required residency, tax filing, purchase price and previous-purchase conditions
- Refugee claimants who meet the requirements under the federal regulations
- Non-Canadians purchasing with a qualifying spouse or common-law partner
- Non-Canadians purchasing residential property for qualifying development purposes
- Purchases of qualifying residential properties located outside a Census Metropolitan Area (CMA) or Census Agglomeration (CA)
What Are the Requirements for a Foreign Buyer Ban Exemption?
Each exemption has its own eligibility criteria. Depending on the exemption, a buyer may need to meet requirements related to:
- Immigration or residency status
- Physical presence in Canada
- Canadian income tax filings
- Work permits or authorization to work in Canada
- The amount of time remaining on a work permit
- Maximum purchase price limits
- Previous residential property purchases
- The purpose of the purchase, including qualifying development activities
What Types of Properties Are Covered by the Foreign Buyer Ban?
The federal foreign buyer ban in Canada applies primarily to certain types of residential properties. This means that not every type of real estate is subject to the prohibition.
Depending on the property and how it is used, covered residential properties can include:
- Detached houses
- Semi-detached homes
- Townhouses
- Condominium units
- Certain buildings with up to three dwelling units
The exact definition of residential property is set out in the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act and its regulations. The rules can depend on factors such as the property’s use, zoning and location.
Can a Non-Canadian Buy Vacant Land in Canada?
Yes. In many cases, a non-Canadian can purchase vacant land in Canada, subject to the applicable federal rules.
Vacant land is treated differently under the federal regulations.
As of March 27, 2023, amendments to the federal regulations allow non-Canadians to purchase vacant land zoned for residential or mixed-use purposes and use that land for development.
What Happens If Someone Violates the Canadian Foreign Buyer Ban?
Violating the federal foreign buyer ban can have serious legal and financial consequences.
Under Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act, it is an offence for a non-Canadian to purchase residential property when the federal prohibition applies and no exemption is available.
What Are the Penalties for Violating the Foreign Buyer Ban?
Under Canada’s federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, purchasing a residential property in violation of the foreign buyer ban can result in significant legal and financial consequences.
A non-Canadian who knowingly purchases residential property when the federal prohibition applies—and anyone who knowingly assists or attempts to assist with the prohibited purchase—can face a fine of up to $10,000.
In certain circumstances, a court can also order the sale of the property. If the property is sold following such an order, the legislation provides for the proceeds to be distributed according to the applicable legal requirements, including provisions addressing any increase in the property’s value.
What Is B.C.’s 20% Foreign Buyer Tax?
The B.C. foreign buyer tax is a 20% Additional Property Transfer Tax that can apply when certain foreign buyers purchase residential property in British Columbia.
It is important to understand that B.C.’s 20% foreign buyer tax is separate from the federal foreign buyer ban. The federal ban determines whether certain non-Canadians can purchase specific residential properties, while B.C.’s Additional Property Transfer Tax determines whether an additional tax is payable when a qualifying foreign buyer acquires residential property in certain areas of the province.
Additional property transfer tax
Can a Foreign Buyer Get a Refund of B.C.’s 20% Foreign Buyer Tax?
A foreign buyer who pays B.C.’s 20% Additional Property Transfer Tax may be eligible for a refund if they later become a Canadian citizen or permanent resident and meet the requirements set by the Province of British Columbia.
To qualify, the buyer must generally become a Canadian citizen or permanent resident within one year of the date the property transfer is registered. Additional eligibility requirements must also be satisfied.
This potential refund can be an important consideration for foreign buyers purchasing property in British Columbia, particularly those who expect their immigration status to change after purchasing a home.
Important Refund Requirements
Before assuming that a refund will be available, buyers should confirm that they:
- Paid the B.C. Additional Property Transfer Tax
- Became a Canadian citizen or permanent resident within the required one-year period
- Meet all other provincial refund eligibility requirements
- Apply for the refund within the applicable deadline
Province of British Columbia — Additional Property Transfer Tax Refunds
Final Takeaway
The foreign buyer ban in British Columbia is not simply a rule that says “foreigners cannot buy homes.”
The federal prohibition contains several exceptions and depends on factors including the buyer’s immigration status, the type and location of the property and the ownership structure.
At the same time, British Columbia has a separate 20% Additional Property Transfer Tax that may apply to foreign nationals, foreign corporations and taxable trustees purchasing residential property in specified areas.
For anyone who is not a Canadian citizen or permanent resident, the safest approach is to determine both federal eligibility and B.C. tax liability before making an offer.
This article is provided for general informational purposes only and is not legal, tax, immigration or financial advice. Government legislation and regulations can change. Buyers should consult a qualified B.C. real estate lawyer, tax professional or other appropriate professional regarding their individual circumstances before entering into a real estate transaction.