The Canadian real estate market has experienced soaring prices, especially in large cities, which has made residential properties increasingly unaffordable for Canadians. To address this situation, the Canadian Parliament has introduced a controversial provision, the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which prohibits foreigners from directly or indirectly purchasing residential property in the country. This new Canadian law raises questions about how it will impact the Italian real estate market.
The principle of reciprocity between states is at the heart of this issue. If Canada prevents foreigners from buying real estate in its territory, the same goes for Canadian citizens who want to buy real estate in Italy. This applies to all nationalities and countries in the world. The new Canadian law means that Canadian citizens will not be able to buy real estate in Italy for at least two years. However, Canadians who have already signed preliminary sales or purchase proposals by the end of 2022 can proceed with the purchase without any issues, provided they can demonstrate that the agreement was in place before January 1, 2023 (registration of the preliminary or of the purchase proposal, payment of a deposit).
The Canadian law would only apply to residential properties located in residential or mixed-use areas, leaving the possibility for Canadian investors to buy properties in non-urban areas or small towns, such as many Italian villages. However, the lack of clarity in the definitions used by Canadian law still leaves many doubts among Italian notaries, who are responsible for verifying reciprocity.
The Ministry of Foreign Affairs is responsible for providing data relating to the verification of reciprocity. However, to date, the site has not presented any updates regarding the new Canadian law. Pending an official reply from the Ministry, the existence of the reciprocity condition with Canada appears questionable.
In conclusion, purchasing a house in Italy as a Canadian may be more complex now with the new Canadian law. Nevertheless, understanding the legal requirements and procedures, working with experienced professionals, and keeping up to date with changes can make the process smoother. With careful consideration, Canadian investors can still find opportunities to buy property in Italy, especially in non-urban areas or small towns.