Acquiring Land in Canada: Alberta's Foreign Ownership of Land Regulation
By Devin P. Mylrea, Shea Nerland Calnan LLP
Canada is increasingly a destination of choice for investment, land development and emigration. However, it is vital to be aware that each Province regulates and controls foreign ownership of real property even if that ownership arises from the acquisition of control of an entity that owns the real property.
In Alberta, acquiring real property interests (and leasehold interests) requires an analysis of whether the real property is “Controlled Land” pursuant to the Agricultural and Recreational Land Ownership Act. In Alberta, all lands are Controlled Land except lands of the Crown in right of Alberta, within the boundaries of a city, town, new town, village or summer village, or mines and minerals. Any acquisition of Controlled Land must comply with the Foreign Ownership of Land Regulations. Canadian persons and entities are required to file form declarations disclosing the names and addresses of shareholders with a 5% interest or greater, including those of beneficial shareholders, where shares are held in trust.
In the case of foreign-controlled entities, a declaration claiming one of few exemptions must be made. If no exemption applies, the entity is prevented from acquiring title and the interest in land. The last recourse is a request for exemption by Order in Council granted by Provincial Cabinet, a somewhat complex matter.
Where a foreign entity is found to have acquired Controlled Lands by acquiring control without exemption, it will be forced to dispose of the lands within prescribed timelines with perhaps serious tax and legal consequences to the client.
A full analysis of the impact of Foreign Ownership of Land Regulation must be conducted to assess the impact on a foreign purchaser’s ability to acquire lands in Alberta.
Devin P. Mylrea, Partner
Shea Nerland Calnan LLP, Calgary, Canady
T: +1 403 299 96 00
Shea Nerland Calnan LLP is a premier tax and business law firm in western Canada based in Calgary. The firm’s lawyers are recognized as highly innovative and at the forefront of complex tax planning opportunities, estate planning, and tax litigation, broad experience in capital markets, securities, real estate, mergers/acquisitions throughout North America, and for business litigation and strategic representation.
Devin P. Mylrea is a partner in the Shea Nerland Calnan LLP Business and Commercial Real Estate Groups. His focus is on M&A, commercial transactions, transactional support in tax planning, reorganizations, real estate, banking and finance matters in a broad spectrum of complexity and size, both domestic and international. He is an active member in the Canadian Bar Association, Alberta Editorial Committee and Council Member
published: February 2014