Canada has decided to extend its ban on foreigners buying homes for another two years to address the issue of housing affordability for Canadians. This could affect Indians living outside of Canada who are interested in buying property there. The ban means they may have to look at other countries for investment opportunities or wait until it’s lifted, according to experts.
Canada had already banned non-Canadians from buying homes in 2022, and this ban was set to end on January 1, 2025. However, it has now been extended to January 1, 2027.
For Indian investors, this extension could mean fewer chances to invest in Canada’s stable real estate market. Instead, they might turn to countries like the UK, Australia, or certain European nations. This might also encourage them to consider investing in properties within India itself, which could boost the local real estate market.
While the ban in Canada limits immediate opportunities for Indian investors, it might push them to explore other markets and types of investments. This highlights the importance of understanding and adapting to different countries’ rules when investing in real estate globally.
Canada also imposes a Non-Resident Speculation Tax (NRST), which is like a stamp duty for foreign buyers. This tax varies by province and can be as high as 25% in Ontario and 20% in British Columbia. It applies to properties purchased by non-residents, unless they qualify for exemptions such as having a student or work visa.
The ban and tax only apply to residential properties, not commercial or multi-residential units. This means foreign investors can still buy these types of properties without restriction.
It’s important to note that while the ban might discourage some foreign buyers, there are still opportunities to invest in Canada, particularly in larger buildings or properties located outside of certain urban areas. However, the additional costs, including the speculation tax and land transfer taxes, can add up for foreign buyers, making purchasing property in Canada more expensive.