Print
version
version
According to Canadian developers, the wording of the ban on the sale of real estate to foreigners, which came into force earlier this year, has a negative impact on the pace of housing construction.
Details. The ban inadvertently prevents companies from buying vacant land for construction due to restrictions on foreign participation. That complicates the solution of the housing crisis in the country — the reason why the measure was introduced in the first place.
What is the problem? According to an analysis conducted by Toronto-based law firm Robins Appleby, the law defines residential real estate not only as completed units, but also as land without any residential premises if it is located in a large locality and zoned for residential use. And the definition of non-Canadians (foreigners) includes any corporation with more than 3% foreign ownership.
Effects. Some developers in Toronto, Canada's largest city, have already canceled plans to buy land and build new housing, fearing they would violate the ban, according to David Wilkes, chief executive officer of the Construction Industry and Land Management Association.
Wilkes' organization reported its concerns to the federal government through the industry's national body, the Canadian Association of Home Builders. He said that his group is in favor of a complete exemption from the ban on the purchase of land for development.
Context. The Trudeau government's ban on foreign buyers was announced in April 2022 as part of a wide-ranging package of measures to curb some of the most unaffordable housing prices in the world. The centerpiece of the plan was a promise to double the pace of new home construction to 400,000 units annually over the next 10 years. The measure came into force in early January 2023.
Source: Bloomberg
Photo by James Thomas on Unsplash
