Canada Global (Web News) The Canadian government is making it simpler for citizens of Canada and newcomers to buy a home.
The government said last week that it was loosening some of an Act’s restrictions that made it challenging for non-Canadians to own residential real estate. Financial institutions can now provide tax-free first-home savings accounts as of April 1. This fulfils a promise made in the Budget 2022.
Restrictions reduced for foreign homebuyers
The government has changed the law and loosened limitations for home purchasers in Canada with a work permit just months after implementing a new law that forbids non-Canadians from acquiring residential property.
The Restriction on the Acquisition of Residential Property by Non-Canadians Act was changed, according to a March 27 announcement from the Canada Mortgage and Housing Corporation (CMCH). If they meet certain requirements, non-Canadians with work permits may now own land with a mix of residential and commercial uses. The modifications took effect the same day they were announced.
Work permit holders are now qualified, according to CMHC, if at the time of purchase their work permit or work authorization had at least 183 days of validity left. Additionally, they have only bought one home property in Canada.
Residential property was defined by the Act as detached homes or comparable structures, semi-detached homes, rowhouse units, residential condominium units, and other comparable locations.
The clause that pertained to vacant land has also undergone modification. Now that vacant land is zoned for both residential and mixed-use, non-Canadians can buy it and utilise it anyway they see fit, including building houses.
Tax filing documentation is no longer required
The existing rules regarding tax filing and prior employment history in Canada are being overturned.
Although there were a few requirements for both holders of work and study permits, it was still technically allowed for temporary residents to purchase a home in Canada under the original Act. Anybody in Canada has a work permit mostly needed to:
-Have worked full-time as defined in Article 73(1) of the Immigration and Refugee Protection Regulations for a minimum of three years within the four years preceding the year the purchase was made (IRPA).
-Have submitted all relevant income tax returns in accordance with the Income Tax Act for at least three out of the four tax years before the year the acquisition was made.
-Have only bought one residential property.
Savings account for the first home
The introduction of the new Tax-Free First Home Savings Account was announced in Budget 2023. (FHSA). Financial institutions will be able to begin promoting this proposal to Canadians as of April 1st, 2023, since it was first suggested in the federal government’s 2022 budget.
The programme enables potential first-time home purchasers to tax-free save up to $40,000. The account’s yearly maximum contribution is $8,000 per year. Similar to a tax-free savings account, contributions to the plan will be tax deductible, and withdrawals used to fund the purchase of a first home will not be subject to taxes.