Canada’s Foreign Buyers Ban

Canada's Foreign Buyers Ban buying homes 307683420 1024x730 1

Who’s exempt from Canada’s foreign homebuyers ban? 

Canada’s ban on foreign homebuyers is now in effect, barring commercial enterprises and individuals outside of Canada from buying residential properties in the country. Passed by Parliament in June of last year, the ban officially began on Jan. 1 and will remain in place for two years.

High levels of demand for housing throughout the COVID-19 pandemic prompted average home prices to skyrocket, hitting a national peak of $816,720 in February 2022. Competition within Canadian housing markets also reached new levels, with properties often receiving multiple offers and buyers submitting purchase agreements with few terms and conditions, leading them to assume more risk.

Although average home prices in Canada have since dropped, housing affordability remains a concern among many Canadians. Fuelling some of this anxiety are rising interest rates. Those with variable-rate mortgages are already paying hundreds more per month, compared to early last year. Those with fixed-rate mortgages, who have yet to renew, also say they are “terrified” of rising interest rates.

As the foreign homebuyers ban takes effect in Canada, here’s what you need to know about the regulations.

WHICH PROPERTIES ARE INCLUDED IN THE BAN?

According to the Prohibition on the Purchase of Residential Property by Non-Canadians Act, a residential property includes detached homes or similar buildings, as well as semi-detached houses, rowhouse units, residential condominium units and other similar premises.

The legislation applies to residential properties that are located in a census metropolitan area or a census agglomeration, says the Canada Mortgage and Housing Corporation (CMHC). A census metropolitan area has a total population of at least 100,000 people, with at least 50,000 living in its core, while a census agglomeration has a core population of at least 10,000 people. The regulations also apply to vacant land that does not have any livable dwellings but is zoned for residential or mixed use.

Homes in municipalities with a core population of less than 10,000 are not subject to the ban, nor are recreational properties such as cottages and lake houses. Additionally, the law does not explicitly ban the purchase of larger buildings with multiple units.

 

WHY IS THE BAN IN EFFECT?

According to the CMHC, the legislation aims to “make homes more affordable” for those living in Canada by cracking down on foreign investment.

“Homes should not be commodities,” Housing Minister Ahmed Hussen said in a press release issued on Dec. 21. “Homes are meant to be lived in, a place where families can lay down roots, create memories and build a life together.”

Housing affordability continues to be a challenge in Canada. Although average home prices have dropped in recent months, an assessment published by the Parliamentary Budget Office in September shows the average cost of a house is 67 per cent more than what the average Canadian household can afford.

A separate report published by Re/Max in September also points to a housing supply crisis in major Canadian metropolitan areas. By limiting foreign investor activity among residential properties, market watchers expect the ban will create new buying opportunities for Canadians by opening up supply.

Despite this, statistics from the CMHC released in 2017 show foreign buyers owned a small percentage of residential properties in different Canadian cities. Additionally, real estate experts have offered mixed reactions to the regulations when it comes to the impact they will have on Canada’s housing market.

WHO IS EXEMPT FROM THE BAN?

Although the legislation targets non-Canadians, there are some exceptions. Those in Canada with temporary work permits are still allowed to buy residential properties, as are refugee claimants and international students who meet certain criteria.

The ban does not apply to those who are Canadian citizens or permanent residents, nor does it apply to non-Canadians who are looking to rent a residential property in Canada.

Non-Canadians with a spouse or common-law partner who is a Canadian citizen, permanent resident, person registered under the Indian Act or refugee are also exempt from the ban.

WHAT HAPPENS TO THOSE WHO BREAK THE RULES?

Non-Canadians who violate the ban can be fined up to $10,000 and may be required to sell the property they purchased. Those who knowingly assist a non-Canadian with their purchase can also be fined.

With files from The Canadian Press  Canada’s housing ban on foreign buyers: What to know | CTV News

READ THE ACT: Prohibition on the Purchase of Residential Property by Non-Canadians Act

Banks sell mortgage insurance, but independent experts say you shouldn’t buy it

Banks sell mortgage insurance, but independent experts say you shouldn’t buy it insurance agents are introducing customers to sign 2021 08 27 09 17 59 utc
Article By Erica Alini  Global News
Personal finance experts are a pretty soft-spoken bunch. It isn’t often that they say they would “never ever” advise buying a certain financial product. But that is exactly what they generally say when asked about mortgage protection insurance, according to Anne Marie Thomas of InsuranceHotline.com, an insurance comparisons site.

Mortgage protection insurance isn’t the mortgage insurance most Canadians are familiar with, the one you need to buy, generally from the Canada Mortgage and Housing Corp. (CMHC), when your down payment is less than 20 per cent of the value of your home. Unlike the better-known mortgage insurance, which protects lenders if homeowners default, mortgage protection insurance is, essentially, a type of life insurance. It covers your mortgage debt if you die or become disabled.

Banks generally try to sell homeowners this type of insurance when they sign up for a new mortgage. Insurance premiums are then seamlessly added to their monthly mortgage payments.

So, what’s not to like about that? A lot, according to Thomas:

1. The payout from mortgage protection insurance shrinks with your mortgage 

These kinds of policies only cover your outstanding debt, meaning the payout gets smaller and smaller as you pay off your mortgage. Insurance premiums, on the other hand, stay the same through the insurance term.

2. You may find out when you file a claim that you aren’t eligible for coverage

Mortgage insurance policies are “typically underwritten after the fact,” noted Thomas. This means that the insurance company will only take a close look at your case once you file a claim. And it may very well find that something in your particular situation violates the insurance contract, which would leave your family without coverage just when they need it most.

If you purchased mortgage protection insurance, comb through your policy carefully to make sure there’s nothing that could potentially exclude you for coverage, advised Thomas.

3. Your might get saddled with higher premiums when you renew your policy

With mortgage protection insurance, you’ll need to renew your policy at the end of your mortgage term, said Thomas. Your new premium will be based on your — now smaller — outstanding mortgage balance, but that doesn’t mean you’ll be paying less. Because you’re a bit older, your premium won’t necessarily go down — in fact, it may go up, Thomas told Global News.

4. Your bank, not your family, pockets the payout

Assuming the claim goes through, mortgage insurance guarantees your family won’t have to worry about mortgage payments if you die or become disabled. In case of death, your beneficiaries can counts on a lump-sum payout that will take care of the outstanding balance, according to Jason Heath of Objective Financial Partners, a fee-only financial planning firm. In case of disability, the policy will generally cover your monthly mortgage payments until the debt is extinguished, he added. But does it make sense to use the money to pay off the mortgage? Not necessarily, said Heath. Perhaps your survivors could have easily eliminated mortgage by selling the house. Or they might have preferred to use the money for other purposes, while keeping up with your mortgage payments. Mortgage protection insurance means any payout will flow out to your mortgage lender, not to you or your family, noted Thomas. And that’s much like CHMC insurance.

Consider plain life insurance instead

Skipping on mortgage protection insurance doesn’t mean you have to go without coverage. Instead, you could buy life insurance, both Thomas and Heath said. With life insurance, your payout remains the same through the term of the policy and the money comes with no strings attached. For example, if you had a $300,000 mortgage and took out a policy for the same amount, your beneficiaries would still receive $300,000 even if you had paid down your mortgage in full by the time the claim is filed. And life insurance is generally much cheaper, too, said Thomas. “It typically could end up costing you half as much,” she said.

Why does anyone get mortgage protection insurance, then?

Many homebuyers, especially those buying their first home, haven’t done enough research to know what they’re getting into, said Thomas. “Generally, the way it’s offered to [homebuyers] is when they’re sitting there, signing a whole bunch of [mortgage] paperwork and they’re bored and they’re starting at the wall,” said Heath. When the bank proposes adding mortgage protection insurance, “for most people, it’s a five-second decision.”

Banking and mortgage industry professionals are often under enormous pressure to sell mortgage insurance, and benefit handsomely through commissions when they do, said Heath. “Your friendly neighbourhood banker is financially motivated to get you to buy mortgage insurance, whether it’s in your best interest or not,” he added. That may be why, a few years back, Heath himself discovered in his first-ever mortgage statement that he was, in fact, paying for mortgage protection insurance even if he had clearly declined coverage. Heath eventually got his lender to cancel the policy and refund the premiums. But many homebuyers aren’t well-informed enough to know they shouldn’t have signed up for the service in the first place.

“Mortgage [protection] insurance is very expensive, but it’s a captive market,” said Heath.
© 2017 Global News, a division of Corus Entertainment Inc.

Your Ultimate Guide to St Andrews, New Brunswick

Guide to St. Andrews NB

Your ultimate guide to St Andrews, New Brunswick. Located in the southwestern corner of New Brunswick, St. Andrews is one of the province’s premier seaside destinations. It was established by the United Empire Loyalists in 1783, and by the 1800s it was one of the region’s largest seaports. The early 1900s saw a shift towards tourism, drawing summer vacationers from Montreal and Boston and today St. Andrews has solidified itself as one of the best seaside destinations in Canada.

Often referred to as St Andrews By-the-Sea, the town was designated a National Historic District in 1998. It’s a wonderful blend of old and new. Its history is proudly on display and you’ll find all the amenities summer vacationers look for in a destination.

In partnership with Destination New Brunswick: https://tourismnewbrunswick.ca/

✶ FEATURING ✶

◆ Kingsbrae Garden
◆ Huntsman Marine Science Centre / Fundy Discovery Aquarium
◆ Historic Water Street
◆ Katy’s Cove Beach
◆ Minister’s Island
◆ The Algonquin Resort
◆ Algonquin Golf Course
◆ Van Horne Trail

About Cindy Kohler, Broker / Owner

Cindy Kohler Fundy Bay Real Estate

Having lived in the St. Andrews area since her parents decided to escape the hustle of Brampton Ontario in the late 80’s, Cindy fully understands and appreciates the many unique benefits of living in a small seaside town. This personal knowledge of properties in the local market empowers her clients with the ability to make informed decisions.

Cindy specializes in all facets of the Real Estate business – with over 15 years in the industry, coupled with years of experience in internet marketing, graphic design, and office administration, she works hard to be on the leading edge of her profession by continuously taking educational courses and expanding her skillset.

As owner and broker of record of this independent boutique firm, Cindy can tailor her services to your needs. She takes the time to learn what you are looking for and then uses her attention to detail and caring, easy-going personality to help guide you through the buying or selling experience.

When Cindy isn’t in the office or volunteering her services for community events, you will find her flying her drone or out with her camera photographing the beauty of St. Andrews by the Sea and enjoying time with family and friends.

Licensed REALTOR®
CLHMS™ – Certified Luxury Home Marketing Specialist
CRB – Certified Real Estate Brokerage Manager
RENE – Real Estate Negotiation Expert
e-PRO® Real Estate Internet Professional
Transport Canada Certified Drone Pilot, RPAS
NAR – National Association of REALTORS® International Member

Waterfront Mansion (SOLD)

Waterfront Mansion (SOLD) DJI 0002

A dream home by the sea! This seaside mansion has just been significantly reduced for an estate sale and won’t be on the market long at this price!

A rare opportunity exists to acquire a waterfront home of this size and style for a price this low! A coastal retreat far removed from the hectic pace of city life, and just minutes from the resort town of St. Andrews by-the-Sea. Situated in an exclusive neighborhood at the former Stoneridge Estates with extensive vistas overlooking Chamcook Harbour. This 3.63 acre dream location has 285 ft of ocean front! Combining formal casual living, this 5007 sq ft 5 bedroom, 4.5 bath luxury home offers 10ft ceilings a 20ft high main entrance leading to a large library, great room, formal dining room, open gourmet kitchen and large wine cellar. The main floor master has an ensuite with grand walk-in shower, raised whirlpool tub, and his hers vanities. The 2nd floor has 9 ft ceilings features 4 large bedrooms, walk-in closets, 3 full baths, balconies and a coffee bar. Perfect as a prestigious family home or enviable holiday retreat – the sooner you act, the sooner your new life begins! HST is applicable but may be negotiated in the purchase price.

MLS® Number NB052705

Ocean View Grand Manan

Grand Manan Ocean View

60 OHIO POND ROAD, GRAND MANAN NB

SPECTACULAR HILLTOP ISLAND LOCATION

VIEW LISTING WEBSITE HERE – The owner of this magnificent island property has spared no time or expense creating a bespoke home that offers luxury and efficiency with many custom features. The sheer size of the open concept, grand living room, with its cathedral ceilings and the custom hardwood staircase, which is a favourite of the owner and his builder, is something to behold. The impressive wall of windows framing the panoramic views is breathtaking and the theme continues beyond the doors to the covered exterior deck with an observation gazebo area, perfect for gatherings.

The home consists of 4 well sized bedrooms and 2 1/2 bathrooms with the magnificent master en-suite being a standout feature, with a double wide shower and premium soaking tub. The master suite also offers a large his and hers walk-in closet space beyond the bathroom and of course there are spectacular ocean views from the bedroom. The home is heated with a highly efficient, state of the art, hot water in-floor heating system on all levels, including the basement level. The insulation was a key factor for efficiency, with 4 inch thick, closed cell spray foam insulation utilized throughout and dense foam under the slab for exceptional efficiency.

The list of features is extensive, if you would like to call this dream home yours, contact Dan Webster today and lets make this dream come true!

Presented at $1,049,900 Canadian Funds

MLS® #: NB047073

Moving to New Brunswick

New Brunswick Canada

There are many reasons to move to New Brunswick. Some people choose to live here to be close to family, or for an affordable lifestyle; others because of our basic, universal, government-funded health care and our excellent education system. Still, others choose New Brunswick to be minutes away from oceans, lakes rivers, and trails as well as lively urban centres and smaller friendly communities.

New Brunswick has one of the lowest rates of COVID-19 cases in the country. Most businesses and organizations have safely reopened by adopting additional measures to protect the health of their employees and customers, and by taking creative new approaches to providing services. Our economy has reopened and will continue to rebound as we move through the recovery phase. New Brunswickers are dedicated to supporting those who have been impacted financially and emotionally by the pandemic; financial assistance, food programs and mental health resources are available to help families recover.

According to the New Brunswick Labour Market Outlook Report for 2018-2027, approximately half of all job openings in the next 10 years will be the in the following sectors:

  • Healthcare and social assistance
  • Retail and wholesale trade
  • Manufacturing
  • Construction

The healthcare and social assistance sector is expected to see a high level of growth, as our population grows older and the demand for healthcare services continues to increase.

To search for job opportunities currently available in New Brunswick, visit NBJobs.ca.

For additional resources, including information on training and development and employment resources, visit the Government of New Brunswick’s Employment website.

For information on settling in New Brunswick, available services for newcomers, a list of immigrant-serving agencies and much more, also refer to the Orientation Guide for Newcomers to New Brunswick and the Quick Reference Guide for Permanent Residents to New Brunswick.

Travel Registration (gnb.ca)

FIND OUT MORE: Moving Here (welcomenb.ca)