The federal government has introduced a ban on most foreign homebuyers in an attempt to cool off the housing market.
Deputy Prime Minister and Minister of Finance Chrystia Freeland announced the plans in Thursday’s federal budget reveal.
“We will make the market fairer for Canadians,” said Freeland in the House of Commons. “We will prevent foreign investors from parking their money in Canada by buying up homes.”
Happening now: The Deputy Prime Minister and Minister of Finance, @CAFreeland, is introducing our government’s plan to grow our economy and make your life more affordable. Watch live for more on #Budget2022: https://t.co/5JcvDW1bjS
— Justin Trudeau (@JustinTrudeau) April 7, 2022
It is now illegal for foreigners to buy residential properties in Canada for the next two years. This includes condos, apartments, and single residential units.
Students, foreign workers, permanent residents, and foreigners buying their primary residence in Canada will be exempt from the measures.
Last year, Prime Minister Justin Trudeau tasked his cabinet with creating a temporary foreign homebuyers ban.
Now that it has come to fruition, the true test is if it can tame the rising cost of housing amid Canada’s inflation rate, which is surging at a historically fast pace.
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In February, the average price for a home in Canada hit a new record high of $748,450, up 21% year-over-year.
Statistics Canada’s latest report saw a 6.6% increase in home prices, the fastest pace since 1983. This saw a hike for both owned and rented homes or apartments.
This economic environment has caused millennials to put plans to buy a home on ice, according to a recent report.
The government is expected to spend $10 billion over the next five years tackling housing affordability in Canada.