Canada is making strides towards increasing homeownership accessibility for its Muslim community by exploring the concept of halal mortgages, aligning with Islamic principles that forbid interest.
This move is part of a broader initiative outlined in the recent federal budget, aiming to cater to the diverse financial needs of communities nationwide. Prime Minister Justin Trudeau's government has initiated discussions with financial institutions to assess how federal policies could better accommodate Canadians facing obstacles related to traditional interest-based lending practices.
The government is contemplating various strategies, including alterations to tax regulations and the establishment of a regulatory sandbox, allowing financial entities to innovate while ensuring robust consumer safeguards. In Islamic tradition, akin to Judaism and Christianity, charging interest is deemed usury and unethical. Although some Canadian financial institutions offer mortgage products adhering to these principles, they are not yet provided by the country's major banks.
In tandem with exploring halal mortgage solutions, the Canadian government has extended a prohibition on foreign investors purchasing residential properties, originally implemented on January 1, 2023. This extension aims to ensure that homes serve as residences for Canadians rather than being treated as speculative assets by foreign buyers.
According to the budget proposal, the government plans to prolong the ban on foreign acquisition of Canadian residential properties for an additional two years, until January 1, 2027. This extension maintains the prohibition on foreign commercial enterprises and individuals who are not Canadian citizens or permanent residents from buying residential real estate in Canada.