“Can foreigners buy property in Canada?” Many people ask this question when considering buying a home or investing in Canada.
The country is safe, peaceful, and home to many beautiful places. That’s why people all over the world show interest. But if you are not a citizen or resident, the rules can be a bit confusing.
You’re worried about extra taxes. You’re not sure about the rules. You wonder if Americans have different rules. And with so many new laws, it’s hard to keep up.
Don’t worry. This guide will explain everything in a simple way, step by step. If you’re a non-resident, an American, or a Canadian living abroad, this blog will help you. Let’s start.
Can Non-Residents Buy Property in Ontario, Canada?
General Rules for Foreign Buyers
Let’s get straight to the point: Yes, non-residents can buy property in Canada.
You don’t need to be a Canadian citizen or a permanent resident to buy a home. Anyone can buy property—whether it’s a condo in Toronto or a cabin in the Rocky Mountains.
But there’s something important to know. In 2023, Canada brought in a new law. It’s called the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
This law limits who can buy homes in certain cities. The goal is to cool down the housing market and stop people from buying homes just to sell them later for a profit.
I’ll explain more about this law in the next section.
What Do These Terms Mean?
To understand the rules, it helps to know these three terms:
- Non-residents: People who live outside of Canada all year.
- Residents: People who live in Canada most of the time.
- Expats: Canadian citizens who live in another country.
Can Americans Buy Property in Canada?
Yes, Americans can buy property in Canada. Many Americans already do. They make up a large number of foreign buyers.
There are no special rules that stop U.S. citizens from buying. But there are a few things to keep in mind:
1. Taxes
If you’re an American buying property in Canada, you’ll need to deal with two tax systems:
- The IRS in the United States
- The CRA (Canada Revenue Agency) in Canada
If you rent out your property or sell it later, you might have to pay taxes in both countries.
But don’t worry—Canada and the U.S. have a tax treaty. This helps you avoid paying the same tax twice.
2. Financing
Getting a mortgage in Canada is possible for Americans, but it can be a bit different.
Here’s what you may need to do:
- Show proof of your income
- Make a minimum 35% down payment
- Work with a Canadian bank or a cross-border lender
Some U.S. banks with Canadian branches can make this easier. They already understand how to help Americans buy homes in Canada.
Want to explore Canadian housing opportunities? Check out our guide to the best cities to invest in real estate to find hot spots for American buyers.
Foreign Buyer Ban: What You Need to Know
In January 2023, Canada introduced a new rule called the Prohibition on the Purchase of Residential Property by Non-Canadians Act.
Most people just call it the foreign buyer ban.
Why Was This Ban Created?
- Home prices in Canada rose very fast over the last few years.
- Many local people—especially first-time homebuyers—could not afford to buy.
- The government wanted to make housing more fair by reducing foreign demand.
- This new law helps slow down price increases.
How Long Does the Ban Last?
- The ban started on January 1, 2023.
- It is set to end on January 1, 2025.
- But the government may extend it if needed.
Who Can Still Buy Property?
Not all foreign buyers are blocked. Some people are exempt from the ban.
Here’s who can still buy property in Canada:
- Work Permit Holders – If you’ve worked in Canada for at least 3 years and filed taxes, you may qualify.
- International Students – Some students can buy if they’ve lived in Canada for a while and meet certain rules.
- Refugee Claimants – Protected people under Canadian law can buy property.
- Spouses of Canadian Citizens – If you’re married to a Canadian, you can buy—even if you’re not a citizen.
- Rural and Small Town Buyers – The ban only applies to large cities. You can still buy in small towns and rural areas.
If you’re buying in a small town or village, the ban may not affect you.
This is a good chance for smart investment in places with less competition. Just be careful—urban sprawl can change where the ban applies.
Urban areas grow fast, and nearby towns can quickly become part of the city zone.
Important Notes for Foreign Buyers
If you’re buying property in another country while living in Canada, the foreign buyer ban does not affect you.
But if you’re a Canadian citizen living outside of Canada and want to buy property in Canada, the rules might apply to you.
However, it depends on your situation and where the property is located. It’s always a good idea to check the latest rules before you buy.
Always check the latest rules before making any decisions. You don’t want to break the law by mistake.
Just be careful of the line between urban sprawl and rural zones. Learn more about urban sprawl in real estate.
Essential Steps to Buy Property in Canada as a Foreigner
Buying foreign property from Canada? Whether it’s a vacation home or an investment, understanding local laws and taxes is key. Here are few essential step you should follow:
Step 1: Choose the Right Property Type
Canada has many types of real estate. Here are some common ones:
- Condos – Easy to take care of. Good choice in big cities.
- Detached Homes – More space, but usually cost more.
- Commercial Properties – For offices, shops, or factories.
- Vacant Land – Harder to get a loan for, but you can build what you want.
For most foreign buyers, condos or resale homes are the easiest to buy. These have fewer rules than farmland or commercial land.
Want to rent the home out? Ensure the city or town allows it. Some areas have rules about short-term or long-term rentals.
Step 2: Financing Options for Non-Residents
If you are not paying the full price in cash, you’ll need a mortgage.
Yes, non-residents can get a mortgage in Canada. But the rules are strict.
Here’s what you usually need:
- At least 35% down payment
- A valid passport or ID
- Proof of income and job
- Recent bank statements
Canadian banks are careful when lending to foreigners.
You can also try international banks that work in Canada, like HSBC or Scotiabank.
Tip: Talk to more than one bank. Comparing mortgage rates can save you money.
Step 3: Legal and Tax Considerations
This part is very important. You should hire a Canadian real estate lawyer.
They will help you with the legal paperwork, title check, and closing costs.
Here are the main taxes to know about:
- Non-Resident Speculation Tax (NRST) – This is a 25% extra tax for foreign buyers in Ontario, including Toronto.
- Capital Gains Tax – If you sell the home later and make a profit, you will pay tax on the gain.
- Land Transfer Tax – This is a fee paid when you buy the property. It changes depending on the province and the home price.
If you’re a non-resident buying property in Ontario, the NRST is the biggest extra cost you should plan for.
How Foreigners Can Sell Property in Canada?
Selling a home in Canada is just as important as buying one—especially if you’re a foreigner.
If you’re a non-resident, the Canada Revenue Agency (CRA) will take 25% withholding tax on the full sale price—not just your profit.
That means if you sell a home for $500,000, they take $125,000 right away, even if you didn’t make that much in profit.
To avoid problems, do these steps:
- Apply for a Clearance Certificate from the CRA before you sell. This shows you followed the rules.
- Report the sale on your Canadian tax return.
- Use a tax treaty, if your country has one with Canada, to reduce or avoid paying tax twice.
If you’re an American, you must also report the sale to the IRS. But don’t worry—the Canada–U.S. tax treaty can give you credit for the Canadian tax you paid.
Before you buy or sell property in Canada, it’s important to understand real estate agent rules. These rules protect buyers and sellers—learn more in our full guide on working with agents.
What are Risks and Challenges for Foreign Buyers?
Buying property in Canada as a foreigner can be a great investment. But it’s not always easy. There are some risks and challenges you should know about before you buy.
1. Currency Exchange
If your home currency becomes weaker compared to the Canadian dollar, your costs will go up.
For example, if your money is worth less than before, it takes more to pay for your mortgage or expenses in Canada. This can affect your budget and your returns.
2. Managing Property from Another Country
If you don’t live in Canada, taking care of the property can be hard. You can’t always be there to fix things or deal with tenants. Many foreign owners hire property management companies.
These companies help with repairs, rent collection, and tenant issues—but they charge a monthly fee.
3. Legal Disputes and Rules
Canada has strong tenant protection laws. In many cases, the law may favor the renter more than the landlord. If a problem happens, it may take time and money to solve it.
Also, you must follow all rules as a foreign buyer. That includes working with licensed real estate agents and following tax laws.
If you’re new to real estate and looking for mentorship, check out the best brokerage firms for new agents.
FAQs on Foreigners Buying Canadian Property
1. Can a foreigner buy property in Canada without visiting?
Yes. You can buy through a lawyer and use a Power of Attorney to sign documents remotely.
Is Canadian real estate a good investment for non-residents?
- Pros: Stable market, strong legal system, growing cities.
- Cons: High taxes, currency risks, foreign buyer ban.
2. Can I get Canadian residency by buying property?
No. Buying property doesn’t get you a visa. But some investment immigration programs exist.
3. Do foreigners pay more property tax in Canada?
Same rates as locals for most taxes. But you may pay extra fees like the NRST or foreign buyer tax.
Conclusion
Yes, foreigners can buy property in Canada, but there are some rules to follow, especially with the foreign buyer ban in place until 2025.
Americans are allowed to buy with no special restrictions. You don’t need to be a Canadian citizen or resident, but you do need to follow the law, pay taxes, and plan your financing carefully.
It’s also very important to hire a real estate lawyer to help with the process. The good news? The ban doesn’t apply to rural areas, so you still have options if you’re looking outside big cities.
Next Steps?
If you’re serious about buying, consult a cross-border real estate expert. They can help you:
- Avoid costly mistakes
- Understand your tax responsibilities
- Pick the right cities and property types
Looking to enter the Canadian real estate industry? Here’s how to get your real estate license in Ontario in just 3 months.
