Canada’s Foreign Buyer Ban: Rules, Exemptions, and Penalties

Canada’s foreign buyer ban blocks most non-Canadians from purchasing residential property in the country’s cities and mid-sized towns. It took effect on January 1, 2023, was extended in February 2024, and now runs until January 1, 2027.¹ Breaking it exposes a buyer to fines of up to $10,000 and a court-ordered sale in which any profit from the property is forfeited to the federal government.² The rules have real exemptions, though, and the ban leaves whole categories of property and geography untouched.

Who Is Treated as a Non-Canadian

The Act reaches four groups. First, any individual who is neither a Canadian citizen nor a permanent resident. Persons registered as Indians under the Indian Act are carved out and can buy freely.² Second, corporations incorporated outside Canada or any Canadian province.

Third, and the category that surprises people, Canadian-incorporated corporations whose shares are not listed on a designated Canadian stock exchange and that are controlled by a non-Canadian. Control means direct or indirect ownership of shares or interests representing 10 percent or more of the entity’s equity value or voting rights, or factual control through any other arrangement.³ A company that looks Canadian on paper can still be caught if a foreign shareholder crosses that 10 percent line.

Fourth, additional persons or entities can be added by regulation. And under Section 6(2) of the Act, any officer, director, agent, or senior official who directed, authorized, or participated in a prohibited purchase can be convicted personally, even if the corporation itself is never charged.²

What Properties and Places Are Covered

The ban targets the homes people actually live in. It applies to detached houses or similar buildings containing no more than three dwelling units, semi-detached houses, rowhouse units, and residential condominium units.² Buildings with four or more units, including apartment complexes, are not covered. Foreign capital can still flow into larger rental buildings.⁴

Since March 27, 2023, vacant land zoned for residential or mixed-use purposes has been excluded from the prohibition, so a non-Canadian can acquire land to develop.⁴

Geographically, the Act reaches only properties inside a Census Metropolitan Area (CMA) or Census Agglomeration (CA) as defined by Statistics Canada. A CMA has a total population of at least 100,000, with 50,000 or more in the core. A CA has a core population of at least 10,000.⁵ Recreational and rural properties outside these population centres are not covered by the federal ban. A vacation home in cottage country or a remote community sits outside the Act’s reach.

Who Can Still Buy Despite the Ban

Several categories of non-Canadians can still purchase, each with its own conditions.

International Students

A student enrolled at a designated learning institution may buy if three conditions are all met: they filed required income tax returns for each of the five tax years before the purchase, they were physically present in Canada for at least 244 days in each of those five calendar years, and the purchase price does not exceed $500,000.³ The price cap makes this exemption workable mainly in smaller markets; in Toronto or Vancouver, $500,000 rarely gets you a covered property type.

Work Permit Holders

A temporary resident who holds a valid work permit, or who is otherwise authorized to work in Canada, may buy if they have at least 183 days of validity remaining on the permit or authorization at the time of purchase, and they have not already purchased another residential property while the ban has been in force.³ Any work permit defined under the Immigration and Refugee Protection Regulations qualifies, provided the 183-day and one-property limits are met.⁶

Protected Persons, Spouses, and Diplomats

Protected persons, including those with recognized refugee status under the Immigration and Refugee Protection Act, are fully exempt.⁴ A non-Canadian spouse or common-law partner of a Canadian citizen or permanent resident may buy jointly with their Canadian partner. Members of foreign diplomatic missions and consular posts may acquire property to support their official duties.

Transfers That Don’t Count as a Purchase

Even for buyers squarely inside the ban, not every acquisition triggers it. The regulations exclude transfers resulting from death, divorce, separation, or a gift. Transfers under the terms of a trust created before January 1, 2023, the date the Act came into force, are also excluded.³ A non-Canadian heir can inherit a family home, and spouses can divide assets after a marriage breakdown, without violating the Act.

Penalties for a Prohibited Purchase

A non-Canadian who buys a covered property is guilty of an offence and liable on summary conviction to a fine of up to $10,000. The same penalty applies to anyone who knowingly assists with a prohibited purchase, including real estate agents, lawyers, and developers.²

Beyond the fine, the Minister can apply for a court-ordered sale. On such an application, the superior court of the province where the property sits can order the property sold. Proceeds go first to secured creditors and legal costs. The non-Canadian purchaser recovers no more than the original purchase price paid, and any profit from appreciation is forfeited to the federal government. Corporate officers and directors who directed, authorized, or participated in the offence can also be convicted in their personal capacity.²

Provincial Taxes That Apply on Top

Federal restrictions are not the only cost. Two provinces impose their own surcharges on foreign buyers, and these apply on top of the standard land transfer tax. They also apply independently of the federal ban, so a buyer who qualifies for a federal exemption or purchases a property type outside the ban can still owe them.

British Columbia charges an additional property transfer tax of 20 percent on the fair market value of the buyer’s share when the property sits in designated regions, including Metro Vancouver, the Fraser Valley, the Capital Regional District, the Regional District of Central Okanagan, and the Regional District of Nanaimo.⁷ On a $1 million property, that adds $200,000 before regular transfer tax.

Ontario’s Non-Resident Speculation Tax applies at 25 percent on the purchase price of residential property located anywhere in the province. It targets foreign nationals, foreign corporations, and taxable trustees.⁸ A work permit holder using the federal exemption to buy in Toronto, for example, would still face this provincial charge.

What Happens After January 1, 2027

The ban is scheduled to expire on January 1, 2027.¹ Whether it will be extended again, made permanent, or allowed to lapse is unresolved. The government has already extended it once. If the federal ban does expire, British Columbia’s 20 percent additional property transfer tax and Ontario’s 25 percent Non-Resident Speculation Tax would continue to apply on their own terms, and any non-Canadian planning a purchase should budget accordingly.

1
Government of Canada. Government Announces Two-Year Extension to Ban on Foreign Ownership of Canadian Housing
2
Justice Laws Website. Prohibition on the Purchase of Residential Property by Non-Canadians Act
3
Justice Laws Website. Prohibition on the Purchase of Residential Property by Non-Canadians Regulations
4
Canada Mortgage and Housing Corporation. Prohibition on the Purchase of Residential Property by Non-Canadians Act
5
Statistics Canada. Census Metropolitan Area (CMA) and Census Agglomeration (CA)
6
Canada Mortgage and Housing Corporation. Amendments to the Prohibition on the Purchase of Residential Property by Non-Canadians Act’s Accompanying Regulations
7
Government of British Columbia. Additional Property Transfer Tax for Foreign Entities and Taxable Trustees
8
Government of Ontario. Non-Resident Speculation Tax