{"id":9544,"date":"2023-01-10T10:24:01","date_gmt":"2023-01-10T15:24:01","guid":{"rendered":"https:\/\/www.djclegal.com\/?p=9544"},"modified":"2023-04-14T13:22:23","modified_gmt":"2023-04-14T18:22:23","slug":"chronicle-law-and-acquired-rights-a-declaratory-judgment-is-expected","status":"publish","type":"post","link":"https:\/\/www.djclegal.com\/en\/chronicle-law-and-acquired-rights-a-declaratory-judgment-is-expected\/","title":{"rendered":"Chronicle – Law and acquired rights: A verdict has been made"},"content":{"rendered":"\t\t
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Written by Me Cl\u00e9ment Lucas<\/a><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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This column discusses the Non-Canadian Residential Real Property Purchase Prohibition Act\u00b9 (“Act”). The Act is scheduled to come into force on January 1, 2023. This column deals more specifically with the situation of non-Canadians who signed a promise to <\/span>purchase<\/span> before this date but whose sale is planned afterwards. It has been updated following the verdict <\/span>rendered<\/span> on January 31, 2023, for which a certificate of no appeal was issued on March 27, 2023.<\/span><\/strong><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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THE ACT<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The purpose of the Act is to prohibit foreign commercial enterprises and persons who are neither Canadian citizens nor permanent residents from acquiring non-recreational residential real estate in Canada for a period of 2 years (from January 1, 2023, to December 31, 2024).<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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To fight inflation and slow down real estate speculation, the federal government announced in December 2021, as part of its “housing policy”, a temporary ban on the purchase of residential property in Canada by foreigners. However, the Act was not adopted until much later, with more specific wording.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Liberal Party website states<\/span><\/b>\u00b2<\/span>\u00a0:\u00a0<\/b><\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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” As a temporary measure to help stabilize the housing market coming out of COVID-19, we will ban foreign money from purchasing a non-recreational, residential property in Canada for the next two years, unless this purchase is confirmed to be for future employment or immigration in the next two years. This will also allow us to work with provinces and municipalities to develop a framework to better regulate the role of foreign buyers in the Canadian housing market so that this money does not deter housing from being available for and used by Canadians<\/em> “.<\/span><\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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A consultation was launched on the implementing regulation (“By-law”) of the Act. It is now closed. The consultation document states in part<\/span><\/b>\u2074<\/span>\u00a0:\u00a0<\/b><\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The Act provides that the By-law may prescribe what constitutes a “purchase” <\/em>for the purposes of the prohibition, as well as define the term “contract”. <\/em>The Act also allows the By-law to further prescribe what constitutes a “non-Canadian<\/em>“. The definition of these concepts is necessary to clarify the scope of the prohibition, including its application to purchases of residential real property made through structures such as corporations, trusts and other entities.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The notion of \"purchase\u201d<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The Act establishes that the prohibition applies to the purchase of residential real property by non-Canadians, directly or indirectly. The objective of the policy is to establish a comprehensive definition of purchase that reflects the fact that non-Canadians may structure their purchases directly or through vehicles such as corporations, partnerships, trusts or other entities.<\/em><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Government also recognizes that there may be certain circumstances arising from transitional or life events where the application of the prohibition could result in undue hardship that is unforeseen or unavoidable. For example, there may be situations where non-Canadians acquire residential real property as a result of unforeseen life events or other arrangements determined before the prohibition comes into effect.<\/u><\/em><\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The objective of the policy is to avoid arbitrary and undue hardship in the application of the prohibition, while establishing clear and transparent criteria for non-Canadians to assess the application of the prohibition to their circumstances. The Government is seeking comment on a proposal to define the term “purchase” as follows:<\/span><\/i><\/div>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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