Canada’s Foreign Buyer Ban Ends January 1, 2027

What is confirmed, and what is not

The federal law that has kept most non Canadians out of the residential market expires on January 1, 2027. As the date approaches, buyers who have been waiting are asking what changes and what does not.

One point is worth settling first. The ban ending and the taxes on foreign buyers ending are two different questions. They come from different levels of government and they are not linked.

When does the ban actually end?

The Prohibition on the Purchase of Residential Property by Non Canadians Act took effect on January 1, 2023 as a two year measure. On February 4, 2024 the federal government extended it by a further two years. The operative expiry date today is January 1, 2027.

What exactly is prohibited right now?

The prohibition covers residential property with up to three dwelling units, including detached and semi detached houses and condominium units. Buildings with four or more units fall outside it.

Location matters as well. The prohibition applies to property inside a census metropolitan area or a census agglomeration. Property outside those areas, vacant land, and recreational property in rural areas are not covered.

Does the ban apply to permanent residents and citizens?

It does not. Canadian citizens and permanent residents are outside the prohibition entirely. In practice this is the point that comes up most often in consultations.

Temporary residents may purchase if they meet set conditions. A work permit holder needs at least 183 days of validity remaining and must not have already purchased under the prohibition. A student must be enrolled in an authorized program, have filed tax returns for each of the five preceding years, have been physically present in Canada for at least 244 days in each of those years, must not have purchased under the prohibition before, and the purchase price must not exceed $500,000. Refugees and people fleeing a crisis are also outside the prohibition. A purchase made jointly with an eligible spouse or common law partner is permitted.

For context on the wider pattern, Statistics Canada reported on June 16, 2026 that in Ontario the homeownership rate of recent immigrants in their fifth year after admission rose from 35.7 percent in 2018 to 40.2 percent in 2021, while the rate among Canadian born individuals fell from 50.7 percent to 47.8 percent. Buying after obtaining permanent residence has been a steady path for some time.

What happens if someone buys in breach of the ban?

A fine of up to $10,000 may be imposed, and a court may order the property sold. Sale proceeds are capped at the original purchase price, so no gain is realized. Where a corporation is involved, officers and directors can also be held liable.

If the ban ends, do the foreign buyer taxes end too?

They do not. The prohibition is federal. The additional taxes on foreign buyers are provincial and municipal.

Ontario’s Non Resident Speculation Tax has been 25 percent since October 25, 2022 and applies to residential property anywhere in the province. The City of Toronto added a municipal tax of 10 percent effective January 1, 2025 on certain residential purchases by foreign entities. Inside Toronto city limits, a foreign buyer therefore faces 35 percent in combined additional tax. On a $1 million home that is $350,000, payable on closing and separate from land transfer tax.

Those rates are unaffected by the expiry of the federal ban. Being permitted to buy and being able to afford the closing are separate questions.

What might replace the ban?

This part is not settled.

Industry reporting in July 2026 indicates that the federal government is looking at a new framework rather than a further extension, and that a model resembling Australia’s approach is under consideration, permitting purchases of newly built homes and vacant land while keeping restrictions on existing homes. No bill or regulation has been published, and nothing here is confirmed.

What is confirmed is the expiry date of January 1, 2027. The shape of what follows is not. Setting a purchase date on the basis of press reporting alone carries risk.

What should buyers and owners be doing now?

Three things are worth reviewing together rather than separately.

The first is status and timing. If permanent residence is expected, the timing of a purchase changes the cost considerably. Ontario provides a rebate of the Non Resident Speculation Tax where the buyer becomes a permanent resident within four years of the date the conveyance is registered. The conditions and deadlines are strict and are best confirmed before the purchase, not after.

The second is title and structure. Purchases in the name of family members living in Korea, joint ownership with children in Canada, and purchases through a corporation each engage the prohibition, both additional taxes, and trust reporting rules at the same time. Deciding on one of those grounds alone tends to create a cost on another.

The third is what happens after closing. Toronto requires an annual occupancy declaration for residential property, and a property that is not declared can be treated as vacant. In a sale, a seller’s missed declaration can become the buyer’s problem at closing.

In short

The federal ban expires on January 1, 2027, and what replaces it has not been decided. Even after it expires, Ontario’s 25 percent and Toronto’s 10 percent remain. Status and timing, ownership structure, and post closing filing obligations are best reviewed as one set of questions.

At Jenna Lee Law, a lawyer and Chartered Professional Accountant reviews the transaction and the tax position together in one office. If you would like to discuss your situation, please get in touch.