Since January 1, 2023, Canada has prohibited the purchase of residential properties by foreign individuals or entities.
This prohibition results from the Prohibition on the Purchase of Residential Property by Non-Canadians Act 2022, which defines:
non-Canadian (a) “an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident”;(b) “a corporation that is incorporated otherwise than other the laws of Canada or a province”; (c)“a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b);(d)“a prescribed person or entity”.
a residential property (i) any real property or immoveable situated in Canada that is a detached house or similar building, containing no more than three dwelling units, together with that proportion of the appurtenances to the building and the land subjacent or immediately contiguous to the building that is reasonably necessary for its use and enjoyment as a place of residence for individuals or (ii) a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises that is a separate parcel or other division of real property or immoveable owned apart from any other unit in the building, together with their relevant appurtenances as above.
This prohibition, however, does not apply to purchases of residential properties (i) made by a temporary resident or a protected person within the meaning of the Immigration and Refugee Protection Act; (ii) made with a Canadian spouse or partner; (iii) made by a person of prescribed class of persons; (iv) made by a foreign State for diplomatic or consular purposes; (v) made as a result of a preliminary contract or any agreement of purchase and sale concluded before the entry into force of the Act in question.
In the 2022 Budget the Canadian government announced its intent to limit the prohibition to a period of two years only, however, this limitation is not reflected in the legislation, therefore this aspect needs to be monitored and clarified in the coming months.
On the Italian side, since January 1 2023, when the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force, it has become necessary to verify if, for the purchase of residential properties in Italy by Canadian citizens or entities, the condition of reciprocity may or may not be considered verified; the Italian ministry of foreign affairs will play a fundamental role in providing the information relevant to this crucial check.