In short
- The federal ban on most foreign home buyers is scheduled to end on January 1, 2027. As of mid-October 2026, Ottawa has not said whether it will let it lapse, extend it or replace it.
- Non-condominium buildings with four or more units, vacant land and properties outside Canada’s urban areas are already outside the ban.
- In Toronto, foreign buyers still pay Ontario’s 25% non-resident speculation tax and the City’s 10% municipal version on homes with up to six units, whatever happens to the ban.
Since January 1, 2023, most people who are not Canadian citizens or permanent residents have been barred from buying homes in Canada’s cities. The rule comes from the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which was first set to run for two years. In February 2024 the federal government extended it to January 1, 2027.
That date is now less than three months away. In December 2025 the federal housing minister confirmed a formal review of the ban, and reports say it includes Australia’s approach, where foreign buyers can generally buy newly built homes but not existing ones. On October 7, 2026, Finance Minister François-Philippe Champagne said the government is still “weighing options.” No decision has been announced.
What the ban covers today
The ban applies to “residential property”, which the Act defines as:
- detached houses and similar buildings with no more than three dwelling units;
- parts of buildings, such as semi-detached houses, rowhouse units and condominium units.
It only applies inside census metropolitan areas and census agglomerations, which include Toronto and the rest of the Greater Toronto Area.
What is outside the ban
- Buildings with four or more units that are not divided into condominium units.
- Vacant land, exempt since March 27, 2023.
- Purchases for development, as defined in the regulations. Renting a property out or renovating it does not count.
- Property outside census metropolitan areas and census agglomerations.
Who can buy despite the ban
- Canadian citizens and permanent residents, who are not “non-Canadians” under the Act.
- Work permit holders with at least 183 days left on their permit on the purchase date, for one property.
- International students who meet strict conditions, including a price of $500,000 or less.
- Protected persons, eligible refugee claimants and diplomats, among others.
A corporation counts as foreign-controlled if non-Canadians hold 10% or more of it. Breaking the ban can lead to a fine of up to $10,000 and a court-ordered sale.
What happens on January 1, 2027
As the law reads today, the Act is repealed on January 1, 2027. Parliament can change that before then, so there are three realistic outcomes:
- The ban lapses and non-Canadians can again buy any type of home, subject to provincial and municipal taxes.
- The ban is extended, as it was in 2024.
- A narrower rule replaces it, for example one that lets foreign buyers purchase new construction only.
We will update this article as soon as the government announces its decision.
Planning a purchase from outside Canada? We will tell you what you can buy today, what it costs to buy, hold and sell, and how to prepare for January. Book an investor consultation and we guarantee a call back within 3 hours.
The taxes that stay either way
The federal ban and the provincial and municipal taxes are separate. Even if the ban ends, foreign buyers in Toronto still face:
| Tax | Rate | Applies to |
|---|---|---|
| Ontario Non-Resident Speculation Tax | 25% | Residential property with one to six single-family homes, anywhere in Ontario, bought by foreign nationals, foreign corporations or taxable trustees |
| Toronto Municipal Non-Resident Speculation Tax | 10% | The same properties in the City of Toronto, since January 1, 2025 |
| Ontario land transfer tax | 0.5% to 2.5% | Every buyer, on graduated brackets |
| Toronto municipal land transfer tax | 0.5% to 2.5%, then 4.40% to 8.60% above $3 million | Every buyer in Toronto; the tiers above $3 million rose on April 1, 2026 |
Together, the two speculation taxes add 35% of the purchase price for a foreign buyer in Toronto, on top of both land transfer taxes. Both can be rebated if the buyer becomes a permanent resident within four years, and some buyers are exempt, including Ontario Immigrant Nominee Program nominees and spouses of Canadian citizens or permanent residents.
One cost has gone: the federal Underused Housing Tax, an annual 1% tax that hit many foreign owners, no longer applies from the 2025 calendar year onward. Filing obligations for 2022 to 2024 remain.
Four or more units: the gap investors are using
Because the federal ban stops at three units, a non-condominium building with four or more units can be bought by a non-Canadian today. The provincial and municipal taxes still matter:
- Four to six units: outside the ban, but the 25% Ontario tax and Toronto’s 10% tax still apply, because both cover properties with up to six single-family homes.
- Seven units or more: outside the ban and outside both speculation taxes. Buildings this size are valued and financed as commercial assets.
Our multi-unit and multifamily guide explains what changes at each building size, and our guide to multiplexes in Toronto covers adding units to a smaller building.
Owning from abroad: rent and resale
- Rental income: your tenant or property manager withholds 25% of the gross rent for the Canada Revenue Agency. If you file form NR6 in time, the 25% is calculated on net rent instead, and you file a section 216 return the following year.
- Selling: non-resident sellers notify the Canada Revenue Agency and obtain a section 116 clearance certificate. Without it, the buyer must withhold 25% of the price, or 50% for some types of property.
How to prepare now
- Confirm your status. Citizenship, permanent residency, work permit dates and where you file taxes all change what you can buy and what you pay.
- Run the full numbers. Include both speculation taxes, land transfer taxes, legal fees, financing, carrying costs, rent and withholding.
- Line up financing early. Lenders usually ask non-residents for larger down payments and more documents.
- Decide how you will hold the property with a Canadian real estate lawyer and a cross-border accountant.
- Shortlist now, decide in January. If the ban lapses, prepared buyers can move first.
Our non-resident buyer guide walks through the purchase step by step, and why invest in Canada covers the wider case.
This article is general information, not legal or tax advice. Rules change; confirm your situation with a lawyer and an accountant before you buy.
Sources
- Prohibition on the Purchase of Residential Property by Non-Canadians Act, Justice Laws Website
- Prohibition on the Purchase of Residential Property by Non-Canadians Regulations, Justice Laws Website
- Government announces two-year extension to ban on foreign ownership of Canadian housing, Department of Finance Canada, February 4, 2024
- Federal government weighs future of foreign homebuyer ban before expiry, Canadian Mortgage Trends, October 7, 2026
- What next for Canada’s foreign buyer ban, MoneySense, October 2, 2026
- Non-Resident Speculation Tax, Government of Ontario
- Municipal Land Transfer Tax information, City of Toronto
- Municipal Land Transfer Tax rates and fees, City of Toronto
- Calculating land transfer tax, Government of Ontario
- Bill C-15 (Royal Assent March 26, 2026), Parliament of Canada
- Income Tax Guide to Electing Under Section 216, Canada Revenue Agency
- IC72-17R6, dispositions by non-residents (section 116), Canada Revenue Agency
