Canada’s Foreign Buyer Ban: What the 2026 Federal Budget Changes

The federal ban on foreign purchases of Canadian homes was due to end on January 1, 2027. It now looks set to continue in a narrower form. In the budget tabled on November 5, 2026, the federal government proposed to keep the ban on existing homes for two more years while allowing non-Canadians to buy newly built homes. None of this is law yet. This article sets out what is confirmed and what is not, as of November 6, 2026.

What Does the Budget Propose?

Budget 2026 proposes to extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, while exempting new residential properties. The budget documents describe existing and resale homes as the properties that would remain off limits. The government says it will introduce legislation and launch a regulatory process on the change in short order.

In practical terms, the resale market would stay closed to most foreign buyers, while new construction would open up. For sellers of existing homes, the pool of eligible buyers would not change. For new housing, foreign buyers could become part of the market again.

What Is Not Yet Decided?

A budget proposal sets direction; the change only takes effect once Parliament amends the law. Under the current Act, the ban still expires on January 1, 2027, so the extension would need to pass before then.

Key details are missing. The budget does not define what counts as a “new” residential property, whether a pre-construction purchase, a never-occupied unit, or a home completed after a set date. It does not mention a price cap, and it does not say when the new-home exemption would take effect. Signing a pre-construction agreement on the assumption that the exemption will apply carries real risk until the rules are published.

What Is Prohibited Right Now?

The ban currently covers residential buildings with up to three dwelling units and parts of them, including detached and semi-detached houses and condominium units. Buildings with four or more units are not covered. It applies only within census metropolitan areas and census agglomerations, so property outside those areas and rural recreational property fall outside it.

Canadian citizens and permanent residents are not affected. Temporary residents may buy if they meet set conditions. A work permit holder needs at least 183 days of validity remaining and must not have bought a home under the Act before. A student must be enrolled in an authorized program, have filed tax returns for each of the five preceding years, have been in Canada for at least 244 days in each of those years, have no previous purchase under the Act, and buy for no more than $500,000. A purchase made jointly with an eligible spouse or common-law partner is also permitted. The budget does not propose changes to these exemptions.

A breach can lead to a fine of up to $10,000, and a court may order the property sold, with proceeds capped at the original purchase price.

Do Foreign Buyer Taxes Still Apply?

Yes. The ban is federal; the additional taxes on foreign buyers are provincial and municipal, and they are unaffected by the budget proposal. Even if new homes open up, these taxes still apply.

Ontario’s Non-Resident Speculation Tax is 25 percent and applies across the province. Since January 1, 2025, the City of Toronto has added a 10 percent Municipal Non-Resident Speculation Tax on certain residential purchases by foreign buyers. Inside Toronto, the combined additional tax is 35 percent, or $350,000 on a $1 million home, payable on closing and separate from land transfer tax. Being permitted to buy and being able to afford the closing are different questions.

What Should Buyers and Sellers Consider Now?

First, status and timing. If permanent residence is expected, the timing of a purchase changes both eligibility and cost. Ontario offers a rebate of the Non-Resident Speculation Tax where the buyer becomes a permanent resident within four years, but the conditions are strict: the home must be occupied as a principal residence from within 60 days of registration, and the application must be made within 180 days of becoming a permanent resident.

Second, title and structure. Buying in the name of a family member abroad, jointly with a child in Canada, or through a corporation engages the ban, both additional taxes, and trust reporting rules at the same time.

Third, for anyone considering new construction, what matters is which rules apply at signing and at closing. Until the regulations are published, it is worth reviewing whether the agreement can include terms that address a change in the law.

What Makes Jenna Lee Law Different

At Jenna Lee Law, you are advised directly by a principal lawyer who is also a Chartered Professional Accountant (CPA). Eligibility under the ban, ownership structure, foreign buyer taxes and rebates, and filing obligations after closing are reviewed together, on both the legal and tax sides. If you are buying for family overseas or considering a pre-construction purchase, it is worth preparing before the new rules are finalized.