Immediately after finishing school, Thiago Aragao set out to make home ownership a reality for him and his wife.
Graduating with a two-year diploma in new media design and production from the Southern Alberta Institute of Technology, the 37-year-old Calgary resident has lived for nearly three years aiming to save as much as possible to one day there he got a position. to buy a house for his family.
“We’ve almost decided on a house. We searched in December, a few different places and we plan to move this year because my rent is going to run out,” said Aragao, who of Brazilian descent, told CTVNews.ca in 2016. A phone interview on Saturday.
But with the federal government’s ban on foreigners buying homes now in effect, Aragao feels he and many other qualified workers who plan to stay in Canada are now being “forgotten”.
“For us, it was a matter of waiting and continuing to work until we became permanent residents,” he said. “But that’s something that also took a lot of time to happen.”
Canada’s ban on foreigners buying homes, effective January 1, prohibits individuals and commercial businesses outside of Canada from buying residential real estate within the country.
The ban will be in effect for two years and its purpose, as described by the Canadian Mortgage and Housing Corporation (CMHC), is to “make homes more affordable” by restricting Foreign investment.
Those found in violation of the ban, including anyone knowingly helping a non-Canadian to make a purchase, could be fined up to $10,000 and could have to sell the purchased property.
Federal Housing Minister Ahmed Hussen said in a press release on December 21, 2022: “Home should not be a commodity. Home is a place to live, a place where families can bond, create, create. memories and build a life together.”
Under the rules, international students, temporary work permit holders and asylum seekers can be exempted from the ban. But Aragao believes the exemption criteria for students and work permit holders are too restrictive.
Foreign homebuyer regulations say work permit holders like Aragao must work full-time and file income tax returns for at least three of the last four years.
But because working hours for international students were previously limited to 20 hours a week, Aragao and other recent graduates with a work permit will not be able to meet the three-year requirement to work full-time. .
In order for international students to qualify for the exemption, they must file income tax returns for the 5 years prior to purchase and be physically in Canada for at least 244 days in each of those years. The purchase price of the property cannot exceed $500,000.
Unless a student earns a four-year degree and then pursues a master’s degree, Aragao doesn’t understand how most people can be a student for five years or so and still qualify for the exemption. buy a foreign house.
“The problem is, it doesn’t make sense,” said Aragao. “So here I come, I studied for two years in a public institution and there is no way I can apply for five years.”
“So I just feel that those two exemptions are very difficult to meet the minimum requirements,” he added.
Housing supply and affordability continue to be major hurdles for anyone looking to buy a home in Canada, with prices rising during much of the COVID-19 pandemic before easing slightly due to rising interest rates.
While it is hoped that curbing foreign investment may open up supply, a CMHC report from 2017 found that foreign buyers own a small percentage of all residential properties in the United States. cities like Toronto and Vancouver.
Diana Mok, an associate professor of real estate, finance and economics at Western University, recently wrote that non-residents, according to data from the Canadian Housing Statistics Program, own only about 2 to 6% residential property by 2020.
“This law is more of a political gesture than an effective tool, although along with rising interest rates, the country’s “red hot housing market” will cool down in the short term,” Mok wrote.
The British Columbia Real Estate Association (BCREA) in November 2022 said it was concerned that the policy would “create obstacles to home ownership for newcomers and could impede their ability to attract Canadian immigrants.”
Canada welcomed a record number of immigrants — 431,645 — in 2022 and plans to attract 465,000 new permanent residents this year.
“Even if a person is not a Canadian resident, they can still contribute to Canada’s economy and community,” BCREA said.
Aragao is about to complete the first year of his three-year work permit and is hoping to qualify for permanent residency.
While he and his wife plan to continue renting, Aragao said he wants a process for people like him to prove that they’re not looking to buy a home just to make money.
“Sometimes, waiting is not an easy thing to do when you are not so young,” he said.
Featuring files from CTVNews.ca Producer Jennifer Ferreira, CTV News Parliamentary Office Writer and Producer Spencer Van Dyk, and Canadian Press