The big question is: can foreigners buy property in Canada? Surprisingly, the answer is yes, but things have changed. There are new rules, lots of exceptions, and the ban doesn’t cover every kind of home or situation.
For people around the world, Canada seems like the perfect place to buy a home, settle down, or invest.
But there’s a problem. The rules for foreigners buying property in Canada can be hard to understand. In 2023, Canada introduced the “Prohibition on the Purchase of Residential Property by Non-Canadians Act.”
Most people call it the Foreign Buyer Ban. The government created this law to slow down rising house prices and make homes more affordable for Canadians.
In this blog, I’ll guide you step by step. You’ll find out who can buy, the meaning of “foreigner,” special cases for Americans, what taxes or extra costs apply, and the exact process to buy if you qualify.
By the end, you’ll have a crystal-clear picture of how foreigners can buy property in Canada—and how you can do it the right way.
Can Foreigners Buy Property in Canada? Understanding the Ban
Let’s get straight to the point: Can foreigners still buy property in Canada? The answer is yes, but it isn’t easy.
The Foreign Buyer Ban
In January 2023, Canada put a freeze on some foreign buyers. This is known as the “Prohibition on the Purchase of Residential Property by Non-Canadians Act” or the ban on foreign buyers in Canadian law.
The government did this because house prices were going up too fast, making it hard for Canadians to find affordable homes.
But here’s what matters to you:
- The ban is temporary. It is set to last until 2027.
- It mostly covers residential properties in big, popular cities like Toronto, Vancouver, and Montreal.
- There are MANY exceptions where foreigners can buy property.
A lot of headlines say “Canada bans foreigners from buying houses.” This isn’t the full story. Foreigners can still buy homes if they fit certain exceptions. The law mostly targets houses in major cities—places with high demand and rising prices.
If you are a foreign investor or just a non-resident hoping to buy a place in Canada, you may still qualify under one of these exceptions.
The rule doesn’t stop all international home buyers in Canada. Instead, it makes buying in hot markets more selective.Understanding urban sprawl in real estate helps buyers spot future opportunities, avoid risks, and make smarter long-term investment decisions.
Who is Considered a “Foreigner” Under Canadian Law?
When it comes to this ban, the word “foreigner” has a very precise legal meaning.
- Anyone who is NOT a Canadian citizen is a foreigner.
- Anyone who is NOT a Canadian permanent resident (PR) is also a foreigner.
- Also, anyone who is NOT registered under the Indian Act (this mainly applies to Indigenous peoples).
It isn’t just individuals—companies and corporations count too. If a company isn’t incorporated in Canada, it’s a foreign buyer.
Even if it is incorporated in Canada, if non-Canadians control the company, it’s still a foreign entity under the law.
Let’s look at real examples:
- If you live in the United States and want to buy a condo in Toronto, you are a foreigner.
- If you are a Canadian citizen living in Europe or the U.S., you are not a foreigner under Canadian law.
- Also, if you are a permanent resident—even if you moved to Canada recently—you are not a foreigner.
A non-resident buying property in Ontario often needs a larger down payment. Preparing finances in advance makes securing mortgages and ownership smoother in the competitive Ontario housing market.
So, the law cares most about your status with Immigration Canada, not where you live or work.
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Key Exemptions: Who Can Still Buy Property?
Here’s the good news. The ban is not total. Many categories of people and properties are excluded from the ban.
1. Temporary Residents
Work permit holders can buy property if:
- They have 183 days or more left on their permit at the time of purchase.
- They have not bought more than one residential property.
International students can buy if:
- They have lived in Canada for five years or more.
- Filed income tax returns for at least four of the last five years.
- The purchase price does not exceed $500,000.
- They have not bought more than one property.
So, if you’re on a work or study permit, you may qualify to buy a home—usually a starter home or affordable condo, not a luxury property.
2. Refugee Claimants and Protected Persons
If you are a refugee claimant whose case has been accepted, or a protected person under Canadian law, you can buy property.
3. Diplomats and Consular Staff
Accredited diplomats, consular officials, and foreign government staff can buy homes for official reasons.
4. Spouses and Joint Purchases
If you’re buying property with your Canadian spouse or common-law partner, you’re exempt from the ban, even if you yourself are a foreigner.
5. Exempt Property Types
Not all buildings are covered. Exempt properties include:
- Recreational properties, vacation homes, cottages, and cabins (not in big cities).
- Properties outside “Census Metropolitan Areas” (CMAs) and “Census Agglomerations” (CAs)—these are rural or smaller towns, not city centers.
- Multi-unit buildings with four or more units.
- Vacant land zoned for residential or mixed use (but not with a house on it).
If you want to buy a lakefront cottage or a rural home, you are likely exempt from the ban.
6. Inherited Properties and Special Transfers
Properties received as inheritance, through divorce/separation, as a gift, or from a trust established before the ban are exempt.
While the Canadian ban on foreigners buying homes is real, these many exceptions mean most genuine students, workers, and people buying in rural areas can still buy a home.
Rules for Americans Buying Property in Canada
Can an American buy property in Canada? The rules are the same for U.S. citizens as for other foreigners.
Yes, Americans can still buy property in Canada—but only if they fit specific exemptions:
- American work permit holders with more than 183 days remaining can buy one property.
- American students in Canada, who meet the requirements listed above, are also eligible.
But the rules are strict:
- Just being an American (even with a U.S. green card) doesn’t make you exempt.
- American citizens must meet Canada’s new rules for foreign buyers.
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Financing for Americans
American citizens buying property in Canada need:
- At least 35% down payment for a mortgage. Canadian banks are strict with foreign buyers.
- Proof of income. Canadian lenders check job history, sometimes requiring a local bank account or co-signer.
- Higher mortgage rates (typically 1–2% above local buyers).
Taxes
- U.S. buyers are subject to all Canadian taxes and fees. This includes land transfer tax, speculation tax (if in provinces like Ontario or BC), and possibly municipal foreign buyer taxes in cities like Toronto.
- Any rental income in Canada may be taxed both in Canada and the U.S.
- You may also owe U.S. taxes back home on any capital gains.
Buying Land
Rules for buying land are softer. Americans may buy vacant land or rural property (outside large cities) if it is for recreation or future development, as long as it is not in a restricted city area.
Americans can buy property in Canada, but it is harder than before and requires fitting one of the special exemptions.
The Step-by-Step Process for Eligible Foreign Buyers
Buying a house in Canada for non-residents often requires a bigger down payment. Mortgage rules may be strict, so preparing finances in advance helps secure property successfully.
If you fall under any of these exemptions, here’s how you can buy property in Canada as a foreigner.
Step 1: Confirm Eligibility
First, check that you really qualify. Are you exempt (work permit with 183+ days left, student meeting residency requirements, etc.)? If you’re not sure, talk to a Canadian real estate lawyer or immigration consultant. Don’t skip this step—illegal purchases can mean big fines.
Step 2: Prepare Your Finances
Canadian banks are stricter with foreign buyers. Plan for:
- 35% or more down payment.
- Credit report or proof of income.
- Some lenders require a Canadian bank account or a co-signer.
- Mortgage interest rates are often higher for non-residents.
If you have friends or relatives in Canada, they may be able to help as co-signers.
Step 3: Mortgage Pre-Approval
This is a must. Lenders will want:
- Down payment proof (transfer, bank statement).
- Verification of income (job letter, tax returns).
- Valid visa or permit.
- Pre-approval gives you a budget and helps you move quickly in a competitive market.
Step 4: Hire a Licensed Realtor and Lawyer
Work with a real estate agent who has experience helping foreign buyers. They’ll know which properties you can legally buy, and which investments are safest.
Foreign investors can buy property in Canada. They should know about taxes, financing rules, and provincial regulations. With the right planning and advice, investing in Canadian real estate can be rewarding and secure.
A Canadian real estate lawyer is necessary. They check title searches, review contracts, and help you with taxes and legal paperwork. Some provinces require that a lawyer be involved in all property transfers.
Step 5: Search and Make an Offer
- Once you find a property, your agent submits an Agreement of Purchase and Sale.
- Negotiate with the seller—having pre-approval helps here.
- Once the seller accepts, you’ll pay a deposit (often 5–10%).
Step 6: Complete Due Diligence
- Get a property inspection.
- Confirm there are no legal issues with the title.
- Make sure all conditions in your offer are satisfied.
Step 7: Final Closing
- Pay land transfer taxes (Ontario, BC, etc. have special foreign buyer taxes, up to 25% extra in Ontario).
- Settle legal fees, pay for home inspection, insurance, and final down payment.
- You may need a Canadian Social Insurance Number (SIN) for tax purposes.
- Once the deal closes, you get the keys to your new Canadian home!
Tip: While the buyer journey is longer and stricter for foreigners, careful compliance and the right team make it achievable.
Taxes and Additional Costs for Foreign Buyers
Many wonder about Americans buying land in Canada. Yes, it’s possible, but rules differ by province. Foreign buyers need to budget for more than just the property price. Here are the main extra costs:
Underused Housing Tax (UHT)
Federal tax on vacant or underused homes owned by non-residents. This targets homes that sit empty most of the year.
Provincial and Local Taxes
- Non-Resident Speculation Tax (NRST): Ontario and BC charge foreign buyers 20–25% on top of the purchase price for residential properties in many regions.
- Toronto Tax: The City of Toronto added its own 10% tax on foreign buyers.
- Speculation and Vacancy Tax (BC): If you buy in BC, you may also owe an annual tax if your home sits empty.
Other Costs
- Property transfer taxes.
- Legal fees for the transaction.
- Home inspection costs.
- Utility or insurance setup.
- Ongoing property taxes and insurance after you own the home.
Always check the latest provincial and municipal rules where you plan to buy. Taxes can be a major added expense for foreign buyers.
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Frequently Asked Questions (FAQ)
Can foreigners inherit property in Canada?
Yes. Inherited properties are generally exempt from the ban. Someone can gift or bequeath Canadian property to a foreigner, and you can keep it.
Can a foreigner buy commercial property in Canada?
Yes. The foreign buyer ban in Canada only covers residential properties (houses, condos, cottages in cities or towns). Buying commercial or industrial properties is NOT restricted.
What are the penalties for violating the buyer ban?
Breaking the law can mean:
- A fine of up to $10,000.
- The court can order you to sell the property, even if you’ve already closed the deal.
Can dual citizens buy property?
If you have Canadian citizenship, even if you live elsewhere, you are not a foreigner, and you can buy property.
Can spouses buy jointly?
If your spouse or common-law partner is a Canadian citizen or permanent resident, you can usually buy a property jointly.
What kind of property is covered by the ban?
The ban mostly applies to single-family homes, condos, and duplexes in large cities (CMAs/urban areas). Rural homes, recreational property, commercial real estate, and buildings with four or more units are mostly exempt.
Future of the Foreign Buyer Ban: Is it Permanent?
The foreign buyer ban from buying homes in Canada is not permanent. As of now, the ban is set to last until January 2027. The Canadian government could extend, shorten, or amend it at any time.
Housing policy in Canada changes often. Markets, politics, and public pressure all have an impact.
If you are thinking about buying a house in Canada as a foreigner, always check the latest updates on the Canada Mortgage and Housing Corporation (CMHC) website or with a Canadian real estate professional.
Conclusion
So, can foreigners buy property in Canada? The answer is yes, but there are clear limits. Canada’s new rules for foreigners buying property may seem strict, but there are many loopholes and exceptions.
If you hold a valid work or study permit, are a protected person, a diplomat, or buying special property types, you can still own a piece of Canada. Many opportunities exist for Americans buying property in Canada, from vacation homes to rental investments. Americans must meet the same strict criteria as other foreigners.
If you’re serious about buying, always:
- Check if you fit an exemption.
- Work with a licensed lawyer and real estate agent.
- Get clear on extra taxes and fees.
Owning a home in Canada is still possible for foreigners. With careful research and the right help, you can achieve your goal and buy with confidence.
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