By Geoffrey Morgan
Canada has lengthened a ban on foreign home buyers for two additional years as the real estate market begins to show signs of a rebound, stoking concerns about the cost of shelter in cities like Toronto and Vancouver.
Prime Minister Justin Trudeau’s government acted to prohibit non-Canadians from buying residential real estate in 2022, with the measure to expire on Jan. 1, 2025. That date has now been moved to Jan. 1, 2027.
“By extending the foreign buyer ban, we will ensure houses are used as homes for Canadian families to live in and do not become a speculative financial asset class,” Finance Minister Chrystia Freeland said in a statement Sunday, adding that the government is concerned about residents being priced out of their local housing markets.
The government has carved out exemptions for non-Canadians buying vacant land or residential property for development. There are also exemptions for foreign students and people on work permits, provided they have been in the country for an extended period and have not already purchased property.
Activity in the housing market has begun to heat up recently as it becomes clearer than the Bank of Canada may be in a position to cut interest rates later this year.
The national benchmark home price in December was C$730,400 ($542,500), an increase of 36% in five years. It’s C$1.2 million in greater Vancouver and C$1.1 million in greater Toronto.
Read More: Homebuyers Are So Frenzied They Won’t Wait for Canada Rate Cuts
Multiple levels of government in Canada have adopted measures aimed at cooling housing costs. This week, Toronto city council will consider a motion to tax the home purchases of non-residents at a rate of 10% of the property value. That’s in addition to the 25% “non-resident speculation tax” imposed by the province of Ontario.
Toronto Mayor Olivia Chow’s office did not immediately respond to a request for comment Sunday.
The motion to be considered Feb. 6 is intended to “maintain a level of affordability in the residential real estate market by discouraging international buyers from purchasing property in the City of Toronto, particularly those buyers who do not intend to live in the property,” according to a recommendation by the city’s executive committee.
FAQs
Canada Extends Ban on Home Purchases by Foreigners to 2026
Are foreigners no longer allowed to buy homes in Canada? ›
On January 1st, 2023, the foreign home ownership ban—formally known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act—went into effect in Canada.
Can U.S. citizens buy property in Canada in 2024? ›
Effective January 1, 2023, the Canadian Government enacted a temporary two-year ban (2023-2024) on non-Canadian purchase of residential real estate, which was extended a further two-years (2025-2026) in the 2024 federal budget to at least the end of 2026.
Can foreigners buy property in Canada in 2025? ›
Are non-residents banned from buying homes in Canada until 2025? Yes, in fact, even longer. They are currently banned from purchasing residential property until 2027.
What is the new rule for buying a house in Canada? ›
All first-time homebuyers will also now be eligible for 30-year mortgage amortizations. With the exception of first-time homeowners buying newly built homes, homebuyers requiring mortgage insurance are currently restricted to 25-year amortizations.
What are the new rules for foreign home buyers in Canada? ›
Under the ban, foreign commercial enterprises and people who are not Canadian citizens or permanent residents are prohibited from purchasing residential property in Canada. The Act and its related regulations came into effect on January 1, 2023.
Can I buy a house in Canada if I am a permanent resident? ›
That means that anyone can purchase property in Canada, whether they're a citizen, permanent resident, temporary visa holder, or just someone interested in owning Canadian real estate. Ultimately, so long as you abide by Canadian taxation and real estate laws, homeownership in Canada is technically possible for anyone.
Can a US citizen buy property in Canada and live there? ›
In sum, Canadian laws are quite liberal when it comes to owning real estate. You don't need to be a Canadian citizen or even live in the country, and property taxes and interest expenses are tax- deductible.
What are the new rules for buying a house in Canada 2024? ›
To help more Canadians, particularly younger generations, buy a first home, new mortgage rules came into effect on August 1, 2024, allowing 30 year insured mortgage amortizations for first-time homebuyers purchasing new builds.
How long can I stay in Canada if I own property there? ›
But unless you get permanent residence from the Canadian government, you may only visit and live in your house for a maximum of six months a year. You must also provide your own health insurance while living in Canada. Visitors are not eligible for Canadian government services.
Housing Affordability By The Numbers
The numbers don't lie. Recent reports have shown that for a millennial to afford an average home in Vancouver and Toronto, they'd require an annual income of $200,000 and $150,000, respectively. And mortgage affordability is just one piece of the puzzle.
Can I just buy a house and move to Canada? ›
In Canada, both permanent residents and non-permanent residents are permitted to purchase property under certain conditions; for instance, if they hold a work permit. However, becoming a homeowner won't give you access to permanent residency and won't change the terms of your visa.
What is the new residential law in Canada? ›
Anti-Flipping Laws
With the new taxation laws, any residential property sold on or after January 1, 2023, that is held for a period of less than 12 months (365 days) will be considered a “flipped property”. Consequently, the seller will be automatically subject to full taxation of their profits as business income.
Can you buy a house in Canada as a US citizen? ›
For real estate investors, looking to Canada can diversify one's portfolio of properties and generate an alternative source of rental income. U.S. residents can own property in Canada without becoming a resident of Canada, but must report income or proceeds from a sale to both country's taxing authorities.
Can a non citizen own a house in Canada? ›
To qualify for a mortgage for a property in Canada, non-residents typically need to fulfill several criteria, including a 35% down payment (not from gifted funds), a reference letter from their bank, an employment letter verifying income in Canadian or US dollars, three months of bank statements, and a Canadian credit ...
Who is eligible to buy a house in Canada? ›
In Canada, both permanent residents and non-permanent residents are permitted to purchase property under certain conditions; for instance, if they hold a work permit. However, becoming a homeowner won't give you access to permanent residency and won't change the terms of your visa.
