On June 23, 2022, the Canadian House of Commons announced a temporary foreign buyer ban aimed at reducing foreign ownership and speculation in Canada’s housing market. Initially effective from January 1, 2023, this ban was set to run for two years. After extensions in 2024, the ban now remains in effect until January 1, 2027.
However, significant changes may be coming. In December 2025, Housing Minister Gregor Robertson announced the government is reviewing the policy and considering ways to attract foreign capital for housing construction starting in 2027. This signals a potential shift in approach to address Canada’s housing supply crisis.
Bill C-19: More Than the Buyer Ban
The Foreign Buyer Ban is part of Bill C-19, which includes several Acts. The “Prohibition on the Purchase of Residential Property by Non-Canadians Act” is one of these, targeting foreign ownership of residential properties as a measure to curb speculative investment and maintain housing affordability.
Who Does the Ban Apply To?
The ban applies to anyone not considered a Canadian citizen or permanent resident under the Citizenship Act. The prohibition includes non-Canadian individuals as well as foreign entities such as corporations and partnerships. Canadian corporations controlled by foreign entities also fall under the ban.
The scope of the ban is limited to residential properties of up to three units, excluding recreational properties (like cottages) and multiplexes with four or more units. The 2023 amendments to the Act now allow non-Canadians to purchase vacant land zoned for residential or mixed-use purposes, permitting flexibility for future development.
Exceptions to the Foreign Buyer Ban
Several groups remain exempt from the ban, including:
- International students: Those who have spent most of the past five years in Canada and are restricted to purchasing property valued at no more than $500,000.
- Work permit holders: Can purchase residential property if they have at least 183 days remaining on their permit at the time of purchase.
- Diplomats and consular staff.
- Temporary residents with refugee status.
Penalties for Violating the Ban
Those who contravene the Act or assist in its violation face fines of up to $10,000. In addition, courts can order the sale of any residential property purchased unlawfully by non-Canadians, ensuring the property returns to the market at no more than the original purchase price.
What’s Coming in 2027? The Policy Review
In December 2025, Housing Minister Gregor Robertson confirmed the ban will remain in place through 2026 but announced a significant policy review. The government is exploring ways to attract foreign capital to fund housing construction without fueling speculation.
Robertson indicated the government will study approaches used in similar countries, particularly Australia, which has restrictions on foreign buyers of existing homes but allows investment in new construction. This could mean:
- Continued restrictions on existing home purchases
- New pathways for foreign investment in purpose-built rentals
- Incentives for foreign capital to fund new housing construction
No specific policy changes have been announced yet, but property buyers and investors should watch for developments in late 2026 as the current ban approaches its expiration date.
Ontario’s Additional Restrictions: The Non-Resident Speculation Tax
Beyond the federal ban, Ontario imposes its own Non-Resident Speculation Tax (NRST) of 25% on the purchase price of residential property by foreign nationals, foreign corporations, and taxable trustees.
This tax applies to properties anywhere in Ontario containing at least one and not more than six single family residences. The NRST is in addition to Ontario’s land transfer tax, meaning a foreign buyer purchasing a $1 million home in Toronto would pay $250,000 in NRST alone, plus approximately $32,200 in provincial land transfer tax.
NRST Rebates
Certain buyers may qualify for a rebate of the NRST, including:
- Those who become permanent residents within four years of purchase
- Foreign nationals who are students enrolled full-time at an approved Ontario institution
- Foreign nationals working full-time in Ontario with a valid work permit
Has the Ban Actually Worked?
The effectiveness of the foreign buyer ban remains hotly debated. According to CBC reporting, foreign ownership accounted for only about 4% of properties nationally in 2023. In British Columbia, one of Canada’s hottest housing markets, only about 1.1% of transactions in 2021 involved a foreign buyer, down from 3% in 2017.
Critics argue the ban addresses a relatively minor factor in housing affordability while potentially discouraging beneficial investment. The Canadian Real Estate Association has called the policy “baseless,” noting there is “no analysis, evidence or data” supporting its impact on affordability.
Supporters counter that even a small percentage of speculative foreign buying can distort prices at the margin, particularly in luxury markets and desirable urban neighborhoods.
The reality is likely somewhere in between. Rising interest rates, inflation, population growth, and insufficient housing supply continue to pose larger challenges to affordability than foreign ownership alone. The ban is one tool among many, including the Housing Accelerator Fund and GST exemptions on new rental housing, aimed at addressing Canada’s housing crisis.
What This Means for Toronto Buyers and Sellers
For most Canadians buying or selling residential property in Toronto, the foreign buyer ban has minimal direct impact. The practical effects include:
For sellers: The luxury market (homes over $5 million) has seen reduced demand from international buyers. As one Toronto real estate executive noted, “People who want to sell houses for more than $5 million can no longer rely on the buyers they used to count on globally.”
For buyers: Less competition from foreign investors at the high end may create opportunities, though this effect is limited to a narrow segment of the market.
For investors: The 2027 policy review may create new opportunities for foreign capital to participate in housing development. Watch for announcements in late 2026.
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