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Foreign Buyer Tax Update: What Can Foreign Buyers Buy in Canada and Ontario—and What Can’t They Buy?
Foreign Buyer Tax Update: What Can Foreign Buyers Buy in Canada and Ontario—and What Can’t They Buy?
Foreign Buyer Tax Update 2026: Can a non-Canadian still buy real estate in Canada? The answer is more complicated than a simple yes or no.
Between Canada's federal foreign homebuyer prohibition and Ontario's 25% Non-Resident Speculation Tax (NRST), foreign nationals need to understand exactly what properties they can buy, where they can buy, and which exceptions may apply.
And there is another major development: Canada's foreign homeownership rules could remain in place even longer, depending on proposed federal measures.
Let's break it down in plain English.
The Big Update: Canada's Foreign Buyer Ban
Canada's Prohibition on the Purchase of Residential Property by Non-Canadians Act prohibits many non-Canadians from purchasing certain residential properties.
Under the currently published federal framework, the prohibition was extended until January 1, 2027.
However, the federal government's newly proposed 2026 budget measures reportedly include a proposal to extend the foreign homeownership ban further, potentially to January 2029. A proposal is not the same thing as a law already in force, so buyers should confirm the rules in effect on their actual closing date.
Bottom line: Foreign buyers should never assume that a rule applying today will necessarily be the rule applying when their transaction closes.
Who Is Considered a "Non-Canadian"?
Generally, the federal legislation defines a non-Canadian as someone who is not:
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A Canadian citizen
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A permanent resident of Canada
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A person registered under the Indian Act
The rules can also apply to certain corporations and entities controlled by non-Canadians.
What Foreign Buyers Generally CANNOT Buy
The federal prohibition generally targets certain residential properties located within major population areas covered by the legislation.
This can include properties such as:
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Detached houses
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Semi-detached homes
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Townhouses
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Condominium units
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Other residential properties that fall within the federal rules
The legislation specifically restricts direct or indirect purchases of covered residential property by non-Canadians unless an exception applies.
This is particularly important for Ontario buyers.
Many of Ontario's most popular real estate markets—including major parts of the GTA, Barrie and Simcoe County's larger urban markets—can fall within the population areas covered by the federal framework.
That means a foreign buyer cannot simply choose a cheaper market outside Toronto and assume the federal restriction disappears.
What Can Some Foreign Buyers Still Buy?
This is where the rules become more interesting.
Not every non-Canadian is automatically prohibited from purchasing every type of property.
Depending on their immigration status, location and the type of property, some buyers may qualify for exceptions.
1. Certain Work Permit Holders
Some temporary residents who hold a qualifying work permit or work authorization may be eligible to purchase residential property.
The regulations include conditions, including requirements related to the validity remaining on work authorization and limits on the number of properties purchased under the exception.
Important: A valid work permit does not automatically mean someone qualifies. The buyer must meet the applicable federal conditions.
2. Some Temporary Residents and Other Protected Categories
The legislation provides exceptions for certain individuals, including qualifying temporary residents and protected persons.
There can also be situations involving a purchase with a Canadian citizen or permanent resident spouse or common-law partner.
Again, the details matter.
Never rely on a verbal assumption that someone is exempt.
3. Properties Outside Certain Major Population Areas
The federal rules are linked to the definition and location of covered residential property.
Some properties located outside the designated Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs) may fall outside the federal prohibition.
CMHC identifies CMAs as areas with a population of at least 100,000, including at least 50,000 people in the core, while a Census Agglomeration requires a population of at least 10,000.
Local insight for Simcoe County and surrounding areas:
This creates an important distinction between:
Urban markets, where the federal rules may apply
and
Certain smaller or more rural communities, where the location may fall outside the covered areas.
But buyers should not assume that “rural” automatically means eligible. Municipal boundaries and Statistics Canada geographic classifications matter.
A property should be checked individually before submitting an offer.
Can Foreign Buyers Purchase Commercial Property?
The federal prohibition is focused on residential property.
Commercial real estate is generally treated differently from a residential home purchase under the federal foreign buyer prohibition.
Depending on the property's structure and use, foreign investors may potentially consider opportunities involving:
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Commercial buildings
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Industrial properties
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Certain development land
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Other properties that do not fall within the prohibited residential category
However, zoning, property classification and the intended transaction structure can be critical.
Ontario's Foreign Buyer Tax: The 25% NRST
Even when a foreign buyer is legally permitted to purchase a residential property, that does not automatically mean they avoid Ontario's foreign buyer tax.
Ontario's Non-Resident Speculation Tax (NRST) is currently 25%.
The NRST applies to the purchase or acquisition of an interest in residential property located anywhere in Ontario by foreign nationals, foreign corporations or taxable trustees, subject to applicable rules and exemptions.
Here's the shocking part:
The 25% NRST can apply to the full value of the property, not just the foreign buyer's ownership percentage.
Ontario gives the following type of example: where multiple people purchase a property and one purchaser is a foreign entity, the NRST can potentially apply to the full consideration for the transaction, subject to the applicable rules.
Example: What Does a 25% Foreign Buyer Tax Look Like?
Imagine a qualifying foreign purchaser buys a property in Ontario for:
$800,000
A 25% NRST could mean:
$200,000 in NRST
And that is separate from other potential closing costs and taxes, including Ontario Land Transfer Tax where applicable.
Ontario confirms that the NRST applies in addition to general Ontario Land Transfer Tax.
That is why a buyer's immigration status should be reviewed before removing conditions or firming up a purchase.
GTA, Barrie and Simcoe County: What Does This Mean Locally?
Toronto & the GTA
The GTA remains one of Canada's most important housing markets for international buyers, newcomers and investors.
For foreign nationals looking at Toronto, Mississauga, Brampton, Markham or other major GTA markets, the federal prohibition and Ontario's 25% NRST can create significant barriers.
A buyer may need to determine:
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Are they prohibited from buying under the federal law?
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Do they qualify for an exception?
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If they can legally purchase, does the 25% NRST apply?
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Are they eligible for an Ontario exemption, rebate or refund?
Barrie & Simcoe County
Barrie and Simcoe County continue to attract buyers looking for more space and relative affordability compared with the GTA.
But foreign buyers should be extremely careful about assuming that moving north automatically avoids the federal restrictions.
Barrie is a significant urban market, and buyers should obtain professional confirmation of whether a specific property falls within the federal rules.
Smaller communities may require a separate geographic analysis.
This could make property location itself one of the most important factors in determining whether a foreign buyer can proceed.
Niagara Region
Niagara is another popular destination for investors, newcomers and international purchasers.
However, the same principle applies:
Being outside Toronto does not automatically mean a foreign buyer can purchase a residential home.
The property's location, classification and the buyer's legal status must all be reviewed.
Can a Foreign Buyer Avoid the Tax by Buying With a Canadian?
Be careful.
Buying with a Canadian citizen or permanent resident does not automatically eliminate every tax or legal issue.
Ontario's NRST rules can be particularly important when there are multiple purchasers.
In some circumstances, the presence of a foreign entity among the purchasers can trigger NRST consequences based on the applicable rules.
Never add someone's name to a purchase agreement simply to try to avoid foreign buyer restrictions or taxes without obtaining proper legal and tax advice.
Are NRST Rebates Available?
Ontario provides certain NRST rebate or refund opportunities for qualifying purchasers.
For example, Ontario states that a Permanent Resident NRST rebate may be available in certain situations where a purchaser becomes a permanent resident within the applicable time period and meets the required conditions.
Ontario also introduced an industrial-use rebate for qualifying circumstances involving residential property repurposed for industrial use.
Eligibility is highly specific, and supporting documentation is required.
The Biggest Mistake Foreign Buyers Make
The biggest mistake is assuming:
“I have a work permit, so I can buy.”
or:
“My spouse is Canadian, so there is no problem.”
or:
“I am buying outside Toronto, so the foreign buyer ban doesn't apply.”
Real estate law is rarely that simple.
A buyer may be:
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Eligible under the federal law but still owe Ontario NRST
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Exempt from one rule but not another
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Eligible to purchase one type of property but not another
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Eligible in one location but not another
Before You Make an Offer: Ask These 5 Questions
What is my exact immigration status?
Canadian citizen, permanent resident, temporary resident and foreign national status can produce very different outcomes.
Does the federal foreign buyer prohibition apply to this property?
The property's location and classification matter.
Do I qualify for a federal exception?
Never assume—confirm.
Will Ontario's 25% NRST apply?
A federal exception does not automatically eliminate Ontario tax.
Should a real estate lawyer review the transaction before I go firm?
For foreign buyers, the answer is often yes.
The Bottom Line: Foreign Buyers Still Have Options—But the Rules Are Complex
The phrase “foreign buyers can't buy homes in Canada” is too simplistic.
The real answer depends on:
- Citizenship and immigration status
- Whether the buyer qualifies for an exception
- The property's location
- The type of property
- Federal restrictions
- Ontario's 25% NRST
- Potential exemptions, rebates or refunds
For buyers in the GTA, Barrie, Simcoe County, Niagara Region and across Ontario, one mistake can potentially create a very expensive tax or closing problem.
The smartest strategy?
Check your eligibility before making an offer—not after you've already gone firm.
Disclaimer
This article is for general educational and informational purposes only and does not constitute legal, tax, immigration or financial advice. Foreign buyer rules, exemptions, taxes and government policies can change. Buyers should obtain advice from a qualified Canadian real estate lawyer, tax professional and, where applicable, immigration professional before entering into a real estate transaction.
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