REALWorld Law

Taxes

Routes for investment

How can investment in real estate by an individual/organization/company be set up?

Canada

Canada

An individual/organization/company may invest in Canadian real estate either directly or indirectly through any of many different legal entities including corporations, unlimited liability companies, general and limited partnerships, limited liability partnerships, and trusts (including real estate investment trusts). The owner may be a Canadian resident or a foreign individual or entity.

Temporary prohibition on non-Canadian purchases of Canadian residential property

Beginning 1 January 2023 however, non-Canadiansare prohibited from buying residiential property in Canada. The prohibition is anticipated to be in place for two years. A non-Canadian means generally:

(a) an individual that is neither a Canadian citizen nor resident in Canada;

(b) a corporation that is not incorporated in Canada; or

(c) a private corporation incorporated in Canada but that is controlled by a person described in (a) or (b).  

There are several exceptions such as, but not limited ‎‎to, temporary residents who satisfy certain conditions, refugees, diplomatic or consular purposes and ‎‎Non-Canadian individuals with Canadian spouses or common law partners. Furthermore, the prohibition ‎‎will not apply to agreements of purchase and sale which are entered into before 1 January 2023. Penalties for non-compliance include a fine of up to $10,0000 as well as the ‎‎forced sale of the residential property.‎