Canada's Foreign-Buyer Ban: What Budget 2026 Would Change

On November 5, 2026, the federal government released Budget 2026, Chapter 3. In that chapter, it proposes to extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, and to exempt new residential properties.

That is a proposal, not a change in the law. The budget says the government will propose legislation and launch a regulatory process on this change in short order. This post sets out what the law says today, what Budget 2026 actually proposes, what that may mean for Ontario investors, and what is still unclear. It is not legal or tax advice.

The short answer

The Prohibition on the Purchase of Residential Property by Non-Canadians Act is still in force. It has been in force since January 1, 2023. Under the law now in force, the Act is set to be repealed on January 1, 2027.

Budget 2026 proposes to keep a ban on foreign purchases of existing residential properties until January 1, 2029, while exempting new residential properties. Until Parliament passes legislation, and any needed regulations are made, those two changes are not in effect. Budget 2026, Chapter 3 does not define "new residential properties" or "existing residential properties."

Ontario's Non-Resident Speculation Tax is a separate provincial tax. It is still 25 per cent, and it applies anywhere in Ontario. A person who is excepted from the federal ban may still have to pay it.

What the law says today

The Act makes it prohibited for a non-Canadian to purchase, directly or indirectly, any residential property, subject to the exceptions in the Act and the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations.

The Act came into force on January 1, 2023. It was originally set to be repealed after two years. Budget Implementation Act, 2024, No. 1, which received royal assent on June 20, 2024, delayed that repeal by two years. The coming-into-force rule now in force is in section 237 of the Budget Implementation Act, 2022, No. 1: the repeal takes effect on the fourth anniversary of January 1, 2023, which is January 1, 2027.

If new legislation is not passed before that date, the Act would be repealed on January 1, 2027. This post cannot say whether or when Parliament will pass the Budget 2026 proposal.

We have written before about foreign buyers and the Toronto market, including whether foreign buyers would come back to Toronto. The rules below are the ones in force as of November 13, 2026, not a forecast of prices or demand.

Who is a non-Canadian

The Act defines a non-Canadian as:

• an individual who is not a Canadian citizen, is not a permanent resident, and is not registered as an Indian under the Indian Act;
• a corporation incorporated outside Canada or a province;
• a corporation incorporated in Canada or a province that is not listed on a designated Canadian stock exchange and that is controlled by a non-Canadian; or
• a person or entity prescribed by the regulations, including certain other entities that are formed outside Canada, or formed in Canada and controlled by a non-Canadian.

The regulations define "control," for this purpose, as direct or indirect ownership of 10 per cent or more of the equity or voting rights, or control in fact.

Which properties are covered

The Act defines residential property as a detached house or similar building with not more than three dwelling units, and as a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit, or similar premises. CMHC's official explanation states that the Act does not prohibit the purchase of larger buildings with four or more dwelling units.

The regulations exclude property that is not in a census metropolitan area (CMA) or a census agglomeration (CA), as those terms are used in Statistics Canada's Standard Geographical Classification 2021. That classification lists both the Toronto CMA and the Hamilton CMA. The legal test is the CMA or CA boundary, not a casual label such as "the GTA." CMHC provides a map tool on its Act page so you can check a specific address.

As of March 27, 2023, the prohibition also does not apply to vacant land.

Exceptions that already exist

The Act and regulations already set out exceptions. Among them:

• certain temporary residents who are studying or working in Canada and who meet the conditions in the regulations;
• protected persons, and certain refugee claimants and people granted a safe-haven exemption;
• a non-Canadian who purchases with a spouse or common-law partner who is a Canadian citizen, a permanent resident, a person registered under the Indian Act, or a person already excepted;
• accredited diplomats and certain other official representatives;
• acquisitions that result from death, divorce, separation, or a gift;
• renting a dwelling as a tenant;
• the exercise of a security interest by a secured creditor; and
• as of March 27, 2023, the acquisition of residential property by a non-Canadian for the purposes of development.

The development exception is not the same thing as buying a finished new home to live in or to rent out. CMHC's frequently asked questions say that buying a property merely to lease or rent it out is not development, and that ordinary repairs or remodelling generally are not development either.

A contravention does not, by itself, make the sale invalid. A non-Canadian, or a person who knowingly assists a non-Canadian, who is convicted of violating the prohibition is liable on summary conviction to a fine of not more than $10,000. A court may also order the property sold.

What Budget 2026 proposes

The operative sentence in Budget 2026, Chapter 3 is:

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 same paragraph says this would keep the vast majority of the market available for Canadians, while unlocking additional investment in new housing supply. It also says the government will continue to support policy measures levied by other levels of government that address housing market pressures, including speculation. It then says the federal government will propose legislation and launch a regulatory process on this change in short order.

Budget 2026, Annex 3 lists a legislative measure titled "Extending the prohibition on foreign buyers." The annex says the government proposes to introduce legislation to extend the application of the Act to January 1, 2029. The annex does not mention the new-build exemption in that table. Chapter 3 refers to both legislation and a regulatory process. The budget does not say whether the exemption for new residential properties would be written into the Act, the regulations, or both.

What this may mean for Ontario investors

Canadian citizens and permanent residents are not non-Canadians under the Act, so the federal prohibition does not apply to them. The practical questions for many Inner Circle members are about counterparties, new construction, and larger buildings, not about whether a Canadian investor can keep buying.

If the Budget 2026 proposal becomes law as described, non-Canadians could be allowed to buy new residential properties, while remaining prohibited from buying existing ones until January 1, 2029. That is why the missing definition of "new" matters. The budget does not say whether the exemption would cover a pre-construction purchase, an assignment, a newly built home that has already been occupied, or a conversion. Until the legislation and regulations are published, those points should not be treated as settled. Our earlier notes on buying pre-construction Toronto condos and on where new construction, prices, rates, and rents stood are useful background on that part of the market. They are not a substitute for the forthcoming rules.

The development exception already in the regulations is narrower than a general new-home exemption. It can already allow a non-Canadian to buy residential property in order to develop it. It does not, on CMHC's explanation, allow a purchase made only to rent the property out.

Larger buildings are already treated differently. A building with four or more dwelling units is outside the federal prohibition, according to CMHC, though an individual condominium unit in a larger building is still residential property under the Act. That distinction matters for investors who buy small apartment buildings rather than condo units. It also sits alongside the new mortgage insurance rules for 3-to-50-unit buildings announced in the same budget chapter, which are a separate measure with their own start date of February 1, 2027.

Foreign-student rental demand is also a different issue from the purchase ban. The regulations already say that renting a dwelling as a tenant is not a purchase. Our earlier look at condos, rents, and demand from foreign students is about tenancy and occupancy, not about who is allowed to take title.

Ontario's Non-Resident Speculation Tax still applies

The federal prohibition and Ontario's tax are not the same rule. Ontario's official Non-Resident Speculation Tax page, updated May 4, 2026, says the tax applies on the purchase or acquisition of an interest in residential property anywhere in Ontario by foreign nationals, foreign corporations, or taxable trustees. Effective October 25, 2022, the rate is 25 per cent. It applies in addition to Ontario land transfer tax.

Ontario also states, clearly, that the federal prohibition operates separately, and that a person who is subject to an exception under the federal prohibition may not be exempt from the NRST. The tax is payable unless the requirements for an NRST exemption are met.

The types of property are not identical either. Ontario applies the NRST to "designated land": land that contains at least one and not more than six single family residences, including a detached house, a semi-detached house, a townhouse, a residential condominium unit, and duplexes through sixplexes. It does not apply to multi-residential rental apartment buildings with more than six units, or to agricultural, commercial, or industrial land. If seven or more residential condominium units are transferred under a single conveyance, Ontario says there is still a transfer of designated land and the NRST may apply. If any one transferee is a foreign entity or taxable trustee, the tax applies to 100 per cent of the value of the consideration, not only to that person's share.

Budget 2026 does not amend Ontario's tax. Even if the federal government later exempts new residential properties from the purchase ban, a foreign national, foreign corporation, or taxable trustee buying a covered home in Ontario would still need to consider the 25 per cent NRST, unless a provincial exemption or rebate applies.

What is still unclear

Several important points are not answered in the official documents reviewed for this post:

• The Budget 2026 proposal is not yet law. This post cannot give a date on which the extension or the new-home exemption will take effect, because no such date has been enacted.
• The budget does not define "new residential properties" or "existing residential properties."
• It does not say how pre-construction contracts, assignments, recently occupied new homes, or conversions would be treated.
• Annex 3 mentions legislation to extend the Act to January 1, 2029, but does not mention the new-home exemption. Chapter 3 refers to legislation and a regulatory process. The form of the exemption is not settled in the budget text.
• The budget does not say whether today's exceptions, geographic scope, or definition of residential property would otherwise stay the same.
• Official federal documents reviewed for this post do not quantify how many purchases, or how much price or supply change, would follow from the proposal. This post does not estimate those effects.

Until the legislation and regulations are published, treat the 2029 date and the new-home exemption as proposed policy, not as the current rule.

FAQ

Is Canada's foreign-buyer ban still in force in 2026?

Yes. The Prohibition on the Purchase of Residential Property by Non-Canadians Act has been in force since January 1, 2023, and it is still in force. Under the law now in force, it is set to be repealed on January 1, 2027, unless new legislation changes that date.

What did Budget 2026 change about the foreign-buyer ban?

Budget 2026, released on November 5, 2026, proposes to extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, and to exempt new residential properties. The government says it will propose legislation and launch a regulatory process in short order. Those changes are not law until that work is completed and in force.

Can non-Canadians buy new homes in Canada after Budget 2026?

Not on the strength of the budget alone. Today, a new home that meets the Act's definition of residential property and sits in a census metropolitan area or census agglomeration is still covered, unless another exception applies, such as a purchase for development. Budget 2026 proposes to exempt new residential properties, but it does not define that term, and the exemption is not yet in force.

Does the foreign-buyer ban apply in Toronto and Hamilton?

Yes, where the property is residential property under the Act and is inside a census metropolitan area or census agglomeration in Statistics Canada's Standard Geographical Classification 2021. That classification includes the Toronto CMA and the Hamilton CMA. Check a specific address against the official CMA or CA boundary, not against a loose label such as "the GTA."

Does Ontario's Non-Resident Speculation Tax still apply if the federal ban is lifted for new homes?

Ontario's 25 per cent Non-Resident Speculation Tax is a separate provincial tax. It applies anywhere in Ontario to purchases of designated residential land by foreign nationals, foreign corporations, or taxable trustees, unless a provincial exemption or rebate applies. Ontario's official page states that a person who is excepted from the federal prohibition may still have to pay the NRST. Budget 2026 does not change that tax.

Can a non-Canadian buy a four-unit or larger apartment building?

CMHC's official explanation of the Act is that the prohibition covers buildings of up to three dwelling units, plus parts of buildings such as condominium units, and that it does not prohibit the purchase of larger buildings with four or more dwelling units. An individual condominium unit is still covered. This is the current law. Budget 2026 does not propose a change to that definition.

Want help thinking this through?

If you are weighing a purchase, a new-construction deal, or a small rental building, it helps to look at the numbers with other Canadian investors who are doing this work. Rock Star Inner Circle hosts a free live training class on real estate investing. You can see the next date and reserve a spot on that page.

This article summarizes official federal and Ontario rules as they stood when this post was written on November 13, 2026. It is not legal or tax advice. Always confirm the current federal statute and regulations, and Ontario's NRST rules, before you act.