Can a Foreigner Buy a House in Canada? Ban, Exemptions, and Taxes

Can a foreigner buy a house in Canada? For most non-Canadians, the answer right now is no. A federal ban blocks foreign nationals and foreign-controlled corporations from purchasing residential property in Canada’s major population centres, and that ban has been extended through January 1, 2027.¹ There are exemptions, and there are properties the ban doesn’t reach, but buyers who qualify still face extra taxes and tighter mortgage rules than Canadian residents.

The Ban and Who It Covers

The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect on January 1, 2023.² It defines a “non-Canadian” as any individual who is not a Canadian citizen or permanent resident. The definition also captures corporations that aren’t incorporated in Canada, along with Canadian-incorporated corporations controlled by foreign nationals or foreign entities.

The Act applies to “residential property,” which means buildings with three dwelling units or fewer. That covers detached houses, semi-detached houses, and condominium units. Buildings with four or more dwelling units sit outside the ban entirely.²

Buying in violation of the Act carries a fine of up to $10,000, and that penalty extends to anyone who knowingly helps a non-Canadian complete a prohibited purchase. A court can order the property sold. The purchase itself is not automatically voided.²

Foreigners Who Can Still Buy

Several groups of non-Canadians remain eligible to purchase, but each exemption has conditions worth reading carefully before making plans.

Work Permit Holders

Temporary residents on a valid work permit qualify if they have at least 183 days of validity remaining on the permit at the date of purchase and haven’t already bought another residential property in Canada. Amended regulations removed earlier conditions that required full-time employment and a history of Canadian tax filings.³

International Students

The student exemption is much harder to meet. A student enrolled at a designated Canadian learning institution must have filed all required Canadian income tax returns for each of the five years before the purchase, been physically present in Canada for at least 244 days in each of those five years, and the purchase price cannot exceed $500,000. Only one property can be bought.⁴ In Toronto or Vancouver, the price cap makes the exemption almost unusable.

Spouses, Diplomats, and Protected Persons

Non-Canadian spouses or common-law partners of Canadian citizens or permanent residents can buy, as can protected persons under Canada’s immigration law and accredited members of foreign diplomatic missions.⁵ Purchase agreements signed before January 1, 2023 are also unaffected.²

Where the Ban Does Not Apply

The ban only reaches residential properties inside Census Metropolitan Areas and Census Agglomerations as defined by Statistics Canada. A Census Metropolitan Area has a total population of at least 100,000 with 50,000 or more in its core. A Census Agglomeration has a core of at least 10,000. Anything outside those boundaries is open to foreign buyers.²

CMHC publishes an online map tool where you can enter a property’s address to check whether it falls in a restricted zone. Rural properties and cottage properties often sit just outside a metro boundary, so verifying before making an offer is worth the few minutes it takes. And regardless of location, buildings with four or more dwelling units are outside the Act.

Extra Taxes Foreign Buyers Pay

Even when the ban doesn’t block a purchase, foreign buyers pay taxes that Canadian residents avoid. Two provinces impose the largest surcharges.

Ontario’s Non-Resident Speculation Tax is 25% of the purchase price on residential property acquired by foreign nationals, foreign corporations, or taxable trustees. It applies province-wide to properties containing one to six single-family residences and stacks on top of Ontario’s standard Land Transfer Tax.⁶

British Columbia charges a 20% additional property transfer tax on residential purchases by foreign entities and taxable trustees inside several designated regional districts: Metro Vancouver, the Fraser Valley, the Capital Regional District, the Regional District of Central Okanagan, and the Regional District of Nanaimo.⁷

Standard provincial land transfer taxes apply on top of these surcharges. Most provinces use progressive tiered systems with effective rates roughly between 0.5% and 2.0% of the purchase price. Those apply equally to residents and non-residents.

The Underused Housing Tax

Non-Canadian owners face a separate federal levy called the Underused Housing Tax. It’s an annual 1% tax on vacant or underused residential property owned by foreign nationals and has been in force since January 1, 2022.⁸ The tax is 1% of the property’s value multiplied by the owner’s ownership share.⁹

Non-Canadian owners must file a UHT return by April 30 of the following year even when an exemption reduces the tax owed to zero. Missing the deadline triggers minimum penalties of $1,000 for individuals and $2,000 for corporations.⁸

The federal 2025 budget proposed eliminating the UHT for the 2025 calendar year and beyond. As of mid-2026, the legislation implementing that change has not yet received Royal Assent, so the filing requirement remains in place. Check the CRA’s UHT page for the current status before assuming otherwise.

Financing a Purchase as a Non-Resident

Canadian lenders will lend to non-residents, but on tighter terms. Most require a down payment of at least 35% of the purchase price. Buyers from the United States may qualify with as little as 20%, depending on the lender. Gifted funds are generally not accepted; the money has to come from the buyer’s own resources.

Documentation is heavier as well. Expect requests for employment contracts, pay stubs, and bank statements, and sometimes international credit reports. Not every Canadian bank or broker serves non-resident buyers, and rate spreads vary widely, so shopping the file is worth the effort.

What Happens After You Buy

Ownership as a non-resident carries obligations beyond property taxes. If you rent the place out, the tenant or property manager must withhold 25% of the gross rent and remit it to the CRA.¹⁰¹¹¹²

Selling later triggers a separate withholding. Under Section 116 of the Income Tax Act, the buyer must withhold 25% of the purchase price and remit it to the CRA unless the non-resident seller has obtained a Certificate of Compliance in advance by filing Form T2062.¹³¹⁴ The certificate reduces the withholding to 25% of the gain instead of 25% of the entire sale price. Without it, recovering the difference means filing a Canadian tax return after the fact.

A Canadian real estate lawyer handles the closing, title registration, and the paperwork tied to non-resident status. Working with one, and with a Canadian tax professional, is realistically the only way to keep these deadlines and forms straight.

1
Department of Finance Canada. Government Announces Two-Year Extension to Ban on Foreign Ownership of Canadian Housing
2
Canada Mortgage and Housing Corporation (CMHC). Prohibition on the Purchase of Residential Property by Non-Canadians Act
3
Government of Canada. Regulations Amending the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations
4
Government of Canada. Prohibition on the Purchase of Residential Property by Non-Canadians Regulations
5
Department of Justice Canada. Prohibition on the Purchase of Residential Property by Non-Canadians Act – Section 4
6
Government of Ontario. Non-Resident Speculation Tax
7
Province of British Columbia. Additional Property Transfer Tax for Foreign Entities and Taxable Trustees
8
Canada.ca. Underused Housing Tax (UHT)
9
Government of Canada. Underused Housing Tax – How to Complete the Return and Calculate the Tax
10
Canada Revenue Agency (CRA). NR4 – Non-Resident Tax Withholding, Remitting, and Reporting
11
Canada.ca. Filing and Reporting Requirements – Rental Income and Non-Resident Tax
12
Canada.ca. Income Tax Guide for Electing Under Section 216
13
Department of Justice Canada. Income Tax Act – Section 116
14
Government of Canada. T2062 Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property