Rules checked: September 16, 2026. General information; this guide does not determine eligibility for a particular transaction.
Buying a home in Canada involves three separate questions: whether you may legally buy, which taxes apply, and whether a lender will approve financing. A down payment does not establish purchase eligibility, and a federal exception does not automatically provide a tax exemption. Start with the buyer’s status, permit expiry date, previous purchases and property address, then have the legal professional handling the transaction assess those details.
As of this review, the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act remains in force and is scheduled for repeal on January 1, 2027. It took effect on January 1, 2023; section 237 of the current budget implementation legislation places repeal on the fourth anniversary. Some explanatory pages still describe a two-year ban, which is outdated. The scheduled repeal is not a guarantee that Parliament will make no further changes. See the Act and the current commencement and repeal provision.
For individuals, non-Canadian means someone who is neither a Canadian citizen, a person registered under the Indian Act, nor a permanent resident. Permanent residents do not need a work-permit exception to escape this definition. Foreign-incorporated corporations and certain Canadian corporations or entities controlled by non-Canadians can also be covered; purchasing through a company is not automatically outside the ban. See sections 2 and 4 of the Act and the Regulations.
Check the property, then every condition of the relevant exception
Covered residential property includes detached houses or similar buildings with no more than three dwelling units, and separately owned or intended-to-be-separately-owned condominium, rowhouse and semi-detached units. Three units are included. Buying an entire building containing four or more units differs from buying an individual condominium in a large building. The Regulations exclude homes outside a census metropolitan area (CMA) or census agglomeration (CA) as defined by the 2021 statistical geography; vacant land has also been excluded since March 27, 2023. Use the address map linked from the CMHC FAQ to check boundaries. Labels such as rural, vacation home or a city name are insufficient. Being outside this federal ban does not remove other land, tax or use restrictions.
The worker exception requires a work permit or authorization to work under section 186 of the Immigration and Refugee Protection Regulations, with at least 183 days of validity remaining on the purchase date. It does not mean having lived in Canada for 183 days, and not every permit qualifies. There is also a purchase limit: section 5 states that the person must not have purchased more than one residential property; the CMHC explanation describes the condition as not having previously purchased residential property while the prohibition is in effect. Have counsel review previous transactions during that period. This is not a test of how many homes you currently own, and selling a previous purchase should not be assumed to reset eligibility.
The student exception requires all of the following: enrollment in authorized studies at a designated learning institution; filing all required income tax returns for each of the five taxation years preceding the purchase year; physical presence in Canada for at least 244 days in each of the preceding five calendar years; a purchase price no greater than CAD 500,000; and the residential-purchase limit above. Tax filing and physical presence are separate conditions. Simply holding a study permit for five years is insufficient. See section 5(a) and the CMHC student guidance.
Other exceptions also have specific boundaries. A protected person is different from someone who has merely filed a refugee claim: the relevant claimant exception requires an eligible claim that has been referred to the Refugee Protection Division. The diplomatic exception requires a valid diplomatic, consular, official or special-representative acceptance issued in the passport by Canada’s Chief of Protocol; a diplomatic passport alone is insufficient. A qualifying joint purchase with a spouse or common-law partner can be exempt, but marriage alone does not automatically exempt a purchase made individually. Check the documents against section 4 of the Act and section 6 of the Regulations.
The ban concerns direct or indirect purchases; it does not require all existing foreign owners to sell. The Regulations exclude certain acquisitions by individuals resulting from death, divorce, separation or a gift, as well as renting a dwelling for the tenant’s own occupation, from the definition of purchase. There is also a provision for obligations under purchase agreements assumed before January 1, 2023: the closing date alone does not settle the question. A conditional agreement is not automatically outside the rules, so check eligibility before entering a binding commitment. See the purchase definition and exceptions and section 4(5) of the Act.
A prohibited buyer, or a person or entity knowingly assisting a prohibited purchase, can face a fine of up to CAD 10,000 on summary conviction. After a non-Canadian buyer is convicted, a court may order a sale on the Minister’s application and subject to statutory conditions. A sale is not automatic, and paying a fine is not permission to buy. See sections 6 and 7 and the conditions for a court-ordered sale.
Separate transaction taxes, financing and ownership costs
BC’s additional property transfer tax is separate from its general property transfer tax. For covered foreign nationals, foreign corporations and taxable trustees, the usual rate is 20% of their proportionate share of the residential property’s fair market value in five regional districts: Capital, Fraser Valley, Metro Vancouver, Central Okanagan and Nanaimo. Tsawwassen First Nation treaty lands are excluded from this additional tax. A qualifying BC Provincial Nominee may have a conditional exemption, but holding a work permit does not establish nomination. Use the BC rules on rates, areas and exemptions; a federal worker exception does not determine provincial tax liability.
Ontario’s NRST rate has been 25% since October 25, 2022, with provincewide application and a separate calculation from general land transfer tax. It has its own property definitions and exemptions, generally covering land containing one to six single-family residences; the federal three-unit boundary does not apply. If a joint buyer is a taxable foreign entity and no exemption applies, NRST can be charged on the consideration for the entire residential transfer, not only that buyer’s share. Its status test is also different from income-tax non-residence. See the Ontario NRST guide; expecting to become a permanent resident later does not itself remove tax payable at closing.
Toronto also charges Municipal Land Transfer Tax (MLTT) and, since January 1, 2025, a 10% Municipal Non-Resident Speculation Tax (MNRST) on certain residential purchases by foreign buyers. Municipal taxes do not replace provincial taxes. Check each exemption separately rather than deriving total costs from a federal eligibility table. See Toronto’s MLTT and MNRST guidance. Acquisition taxes should also be kept separate from any vacancy-related obligations during ownership.
Beyond the down payment, allow for possible closing costs such as legal or notarial services, title insurance, property-tax adjustments and inspection. Amounts depend on the property, location and service, so this guide does not offer a nationwide fixed fee schedule. The FCAC homebuying guide and IRCC guide provide a starting checklist. An inspection helps assess condition; it cannot guarantee every defect will be found or that its cost will be recovered. If you want room to renegotiate or withdraw based on the inspection, have appropriate contractual conditions reviewed by the professional handling the purchase.
Ongoing costs can include mortgage payments, property tax, home insurance, heating, utilities, repairs and applicable condo or strata fees. Both IRCC and FCAC include continuing housing expenses in financial planning. Build a budget around your income, other debts and repair reserve. A lender’s maximum offer need not become your target purchase price.
Lenders separately assess income, expenses, debt, credit and repayment capacity, so legal purchase eligibility does not guarantee mortgage approval. Overseas credit may not be recognized in the same way; ask which income and credit documents the lender accepts instead of assuming every newcomer faces delays or identical lending limits. See the FCAC preparation guide and IRCC credit-history guidance. A down payment below 20% of the price typically requires mortgage loan insurance. This default insurance primarily protects the lender; it does not cover the buyer’s unemployment or repayment risk.
At the review date, OSFI’s qualifying rate for most newly underwritten uninsured residential mortgages at federally regulated lenders is the higher of the contract rate plus two percentage points or 5.25%. This is a repayment-capacity test, not a quoted borrowing rate. A qualifying straight switch at renewal, with no increase to either the loan amount or amortization period, is treated differently. Do not apply the same statement to every lender, loan or renewal. See OSFI’s current minimum qualifying rate.
Buying property does not automatically grant permanent residence or citizenship. Permanent residence requires the immigration application and approval process, while citizenship has separate eligibility and procedural requirements; a property deed cannot substitute for them. See section 21 of the Immigration and Refugee Protection Act and IRCC citizenship eligibility.
Before signing, assemble status and permit documents, purchases made during the ban, the address and title information. Have the legal professional check purchase eligibility and each level of tax, then obtain the lender’s applicable approval conditions and an itemized cost estimate. If your immigration plans, work location or budget remain uncertain, compare renting and buying in the same cash-flow plan. Renting need not be treated as failure. For an initial place to stay, see the Canada accommodation and short-term rental guide; the Canada life guide covers other settlement tasks.