Canada, in 2023, is closing its doors to Nigerians and other foreigners who intend to buy residential properties for the next two years according to a new law that took effect on January 1.
The ‘Prohibition on the Purchase of Residential Property by Non-Canadians Act’ was enacted to lower residential property prices, thought to have risen sharply due to foreigners buying the homes as investments and leaving locals with no choice but to purchase at exorbitant prices.
“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” Prime Minister Justin Trudeau’s Liberal Party wrote on its website.
It added, “This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.” In cities like Vancouver and Toronto, taxes have been introduced to non-residents and vacant properties to deter foreign investors and make housing costs affordable for locals.
The new law, however, makes exceptions for immigrants and permanent residents, allowing them to own residential properties. Average home prices from more than $590,000 at the beginning of 2022 have significantly dropped to $465,000, according to the Canadian Real Estate Association (CREA).
The association worried Canadians could suffer should countries like the U.S. and Mexico pass a similar law in retaliation.
“Canadians purchase vacation and residential properties in many countries, but particularly in the United States,” noted CREA.
The group asserted that many locals who buy properties abroad to escape Canada’s cruel winter might be the ones to bear the brunt of the new law.
“These provide Canadians with a place to spend the winter months and are a form of savings for Canadian retirees,” asserted CREA. “If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind.”