Introduction
An extension of the ban means Indian investors will have to look elsewhere for investment opportunities. Or wait until the ban is lifted, as real experts feel.
Canadian Real Estate: Canada’s decision to extend the ban on foreign home buyers for an additional two years to address the housing affordability issue for Canadians. A non-Canadian resident may influence demand among Indians. Extending the ban will force Indian investors to look elsewhere for investment opportunities. Or wait until the ban is lifted, say real estate experts.
Canadian Real Estate: Extension of Ban on Foreign Home Buyers
The Canadian government on Feb. 5 extended a ban on foreign home buyers for two additional years to make more housing available to its citizens. Real estate experts believe that this move will lead to investors considering alternative investment avenues in other countries.
The government previously banned non-Canadians from buying residential real estate in 2022. Expires on January 1, 2025. That date has now been changed to January 1, 2027.
“For Indian real estate investors, this extended ban will reduce investment opportunities. This has many effects such as changing their focus on investment. Canada is a popular destination for real estate investment because of its stable market, strong property rights, and potential for appreciation. Extending the ban will force Indian investors to look elsewhere for investment opportunities. Otherwise, we will have to wait until the ban is lifted,” said Ashwin Chadha, CEO of India Sotheby’s International Realty.
The UK has similar economic stability as Australia or some European countries. Countries with growth potential may attract interest from Indian investors. This leads to a deeper exploration of domestic opportunities within India itself. He said it will boost the local real estate market.
Govt’s Desire to Put Canadians First to Use Housing
The Canadian Real Estate Association (CREA) supports the government’s desire to put Canadians first in housing. Other policy measures may better achieve the intended objective without depressing supply growth.
CREA is one of Canada’s largest single-industry associations and represents more than 160,000 realtors. “We believe the federal government should focus its efforts on policies that support the construction of more homes across the entire continuum,” CREA said.
About the Non-Resident Speculation Tax in Canada
Also known as the Canada Non-Resident Speculation Tax (NRST). “It is like stamp duty and is also known as foreign buyer tax. Foreign buyers must pay this tax when purchasing property anywhere in the province of Ontario or parts of British Columbia. NRST is 25% in Ontario and 20% in BC,” says a real estate expert.
According to Levi Javette Lawyers, a Canadian law firm, the non-resident speculation tax is not a federal or national tax on foreign home buyers. It is regional, and each province may have its own. For example, in Ontario, the tax is now 25% on homes purchased after October 25, 2022. Applies to all of Ontario. However, this only applies to homes in the Greater Golden Horseshoe area of Ontario.
Tax and Prohibition Apply Only to Residential Properties
“The ban on foreign home buyers does not apply to commercial and multi-residential units. It allows interested investors to pursue such properties without restriction,” the lawyer said. Jagmohan Singh Nanda, notary of advocate and law firm, Nanda & Associate Lawyers said.
Conclusion
A recent decision by the Canadian government extended the ban on foreign home buyers for an additional two years. It aims to address housing affordability for its citizens. However, this move has implications for non-Canadian resident Indians interested in the Canadian real estate market. For more information, visit our Openplot.com platform.
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