Re: CAPL Successful in Removing Lenders from Foreign Buyers’ Ban
The Federal Government has now published regulations under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, following a lengthy post-consultation period. The proposed regulations would have prohibited lending entities with 3% or more foreign shareholders from acquiring real estate through the enforcement of their mortgage security.
CAPL urged the government to reconsider this element of the definition of “acquire” by ensuring that mortgage lending entities which gain possession and/or ownership of property through the enforcement of their mortgage security when borrowers default are not captured by the prohibition. CAPL was successful in achieving this modification to the prohibition: the Federal Government advises that: “Regulations contain a streamlined definition of “purchase” and its associated exceptions, including to avoid disruption to the established rights of creditors and the provision of housing finance.”
CAPL anticipates that the government will publish a streamlined plain language guide to the prohibition, including questions and answers which will assist industry members. The prohibition comes into effect on January 1, 2023.