Canada’s foreign buyer ban stops most non-Canadians from buying residential property here at all, before any tax or closing cost even enters the conversation. The law is the Prohibition on the Purchase of Residential Property by Non-Canadians Act, in force since January 1, 2023 and currently extended to January 1, 2027. It is a hard eligibility gate, separate from the Non-Resident Speculation Tax that applies once a buyer has already cleared it. This guide covers what the Act bans, who the named exemptions cover, which properties fall outside its scope, what happens to someone who breaks it, and how it sits in front of the surcharge our guide to Ontario’s foreign buyer tax already explains. For the rest of a Toronto purchase, see our complete Toronto real estate guide or browse the rest of our guides.
What the Act bans, and who counts as a non-Canadian
The Prohibition on the Purchase of Residential Property by Non-Canadians Act bars a “non-Canadian” from buying residential property in Canada, directly or through a corporation or other entity it controls. A purchase made in breach of the Act is still legally binding once it closes, but the ban exists to stop the purchase from happening in the first place, which is why a buyer needs to clear it before signing anything, not after.
The Act’s own term is “non-Canadian,” not “foreigner,” and the difference matters because the definition is specific. A non-Canadian is a person who is neither a Canadian citizen nor a permanent resident, or a corporation incorporated outside Canada, or a Canadian corporation controlled by a person or entity that falls into either of those categories. A Canadian citizen or permanent resident is never covered by the ban, however long they’ve lived outside Canada or whichever other citizenships they hold.
Who is exempt
A temporary resident can buy if they meet conditions set out in the regulations, and the conditions differ by status. A person studying in Canada on a study permit qualifies if they’ve filed Canadian income tax returns for each of the five years before the purchase, were physically present in Canada for at least 244 days in each of those years, and haven’t already bought more than one residential property at a price above $500,000. A person working in Canada on a valid work permit or authorization also qualifies, subject to conditions tied to that permit’s validity and work history; the exact threshold has been revised since the Act first took effect, so a buyer relying on the work-permit route should confirm the current wording directly against the regulations before counting on it.
A refugee or protected person, recognized under subsection 95(2) of the Immigration and Refugee Protection Act, is exempt. So is someone granted temporary resident status on humanitarian grounds as part of a response to a crisis abroad, and someone whose refugee claim has been found eligible and referred for a hearing. An accredited member of a foreign mission, with the Chief of Protocol’s acceptance on file, is exempt as well.
A non-Canadian who buys together with their spouse or common-law partner is exempt, provided that spouse or partner is a Canadian citizen, a permanent resident, a registered Indian under the Indian Act, or someone who qualifies under one of the other exemptions above. A handful of narrower exemptions also apply to specific transfers rather than purchases in the ordinary sense: a property acquired through death, divorce, or separation; a tenant renting a home to live in it; a transfer under a trust that existed before the Act came into force; and a transfer arising from a secured creditor enforcing its security. The regulations themselves set out the full exemption list, and CMHC also publishes its own buyer-facing guidance on the ban, worth reading alongside the regulation text rather than instead of it.
Which properties the ban covers, and which it doesn’t
The ban applies to “residential property” as the regulations define it: detached homes, semis, townhouses, and buildings with fewer than four residential units, including a condominium unit, located inside a census metropolitan area or a census agglomeration. Those are Statistics Canada’s own terms for Canada’s major urban regions; the Greater Toronto Area, Hamilton, and Ottawa are each one. Vacant land zoned for residential or mixed use inside one of those areas falls under the same rules once it’s intended for residential development.
Property located outside every census metropolitan area and census agglomeration falls outside the ban entirely, regardless of what it’s used for. A recreational property in a small town or a rural area, well beyond any of Canada’s major urban regions, is not something a non-Canadian needs an exemption to buy, because the Act’s own definition of residential property never reaches it in the first place. A buyer unsure whether a specific address sits inside or outside one of these boundaries should check Statistics Canada’s own geographic reference before relying on general directions from a listing or an agent.
The ban was due to end two years earlier than it now will, and no decision on a further extension has been announced.
How the ban differs from the NRST and MNRST
Clearing the ban and clearing the tax are two separate tests, and passing one says nothing about the other. The ban decides whether a non-Canadian can buy residential property at all. Ontario’s Non-Resident Speculation Tax, and Toronto’s own Municipal Non-Resident Speculation Tax on top of it, decide how much tax a foreign buyer pays once they’re allowed to proceed. Our guide to the NRST and MNRST covers that surcharge, currently 25% provincially and another 10% in Toronto, along with its own separate exemptions and rebate process; this guide doesn’t repeat that mechanic.
The two sets of exemptions don’t line up with each other. A non-Canadian exempt from the federal ban under the work-permit route, for example, isn’t automatically exempt from the NRST, which has its own eligibility conditions tied to things like a commitment to become a permanent resident. A buyer working through this needs to check both tests separately rather than assuming that qualifying for one settles the other.
When the ban is set to end
The ban took effect January 1, 2023 and was originally set to expire two years later, on January 1, 2025. In a February 4, 2024 announcement, the Department of Finance extended it by a further two years, moving the expiry to January 1, 2027. That is the current, confirmed date as of this guide’s last check. The Department of Finance has not announced what happens when that date arrives, and this guide does not predict it. A buyer negotiating a deal that would close close to or after January 1, 2027 should treat the ban as fully in force up to that date and check canada.ca directly for any update before relying on an assumption that it will lapse, extend again, or change shape.
What happens if someone breaks it
A non-Canadian who buys in breach of the Act, and anyone who knowingly helps them, counsels them, or assists the purchase, is guilty of an offence and liable on summary conviction to a fine of up to $10,000. Where a corporation commits the offence, an officer or director who directed, authorized, or knowingly took part in it can be held personally liable alongside the corporation. A real estate agent, lawyer, notary, or mortgage broker who knowingly assists a non-compliant purchase can be liable in the same way.
The sale itself still stands once it closes; the Act doesn’t undo the transfer automatically. Instead, a court can order the property sold on application, and the non-Canadian who bought it cannot recover more from that forced sale than they originally paid for the property. That is a financial consequence distinct from the fine, and it’s the mechanism that unwinds a non-compliant purchase rather than simply punishing it after the fact.
Frequently asked questions
Who is banned from buying property in Canada right now?
Anyone who is a non-Canadian under the Act’s own definition: not a Canadian citizen, not a permanent resident, and not otherwise exempt. That includes a foreign national living abroad, a foreign national on most types of temporary status in Canada, and a foreign corporation or a Canadian corporation controlled by either. It does not include a Canadian citizen or permanent resident, whatever other citizenship they also hold, and it does not include someone who qualifies under one of the Act’s named exemptions, such as a temporary resident meeting the study-permit or work-permit conditions, a refugee or protected person, or a non-Canadian buying together with an exempt spouse or common-law partner. The ban only reaches residential property inside a census metropolitan area or census agglomeration, so a non-Canadian is free to buy outside those areas without needing any exemption at all.
Can a foreign student or worker in Canada buy a home?
Sometimes, under specific conditions tied to their status, not automatically because they hold a study or work permit. A student qualifies only if they’ve filed Canadian tax returns in each of the five years before the purchase, were physically present in Canada for at least 244 days in each of those years, and the property they’re buying is priced at $500,000 or less, with no more than one such purchase. A worker qualifies under conditions tied to their permit’s validity and work history, and those conditions have been revised since the Act took effect, so the current wording should be checked directly against the regulations rather than assumed from an older summary. Someone who doesn’t meet the specific conditions for their status is still covered by the ban, even while living and working in Canada.
Does the foreign buyer ban affect cottages and recreational property?
Only if the property sits inside a census metropolitan area or census agglomeration, which most cottage country does not. The Act’s ban on residential property only reaches areas Statistics Canada classifies as a major urban region; a recreational property well outside one of those regions falls outside the definition of residential property the Act uses, so a non-Canadian doesn’t need an exemption to buy it. A buyer should confirm the specific location against Statistics Canada’s own geographic boundaries rather than assuming “cottage country” automatically means “outside the ban,” since some recreational areas sit close enough to a city to fall inside its census agglomeration.
Is the foreign buyer ban the same as the foreign buyer tax?
No, and conflating them is the single most common mistake buyers make researching this. The federal ban decides whether a non-Canadian can legally buy residential property at all; it has no tax rate and collects no money. Ontario’s Non-Resident Speculation Tax and Toronto’s Municipal Non-Resident Speculation Tax, covered in our separate guide to the NRST and MNRST, are provincial and municipal charges that apply once a foreign buyer has already cleared the federal ban, currently adding up to 35% of the purchase price in Toronto specifically. A buyer has to clear both tests independently: being exempt from the ban doesn’t exempt anyone from the tax, and the reverse holds too.
What happens if someone buys a home in Canada while banned from doing so?
The purchase can still legally close, but it creates exposure afterward. The buyer, and anyone who knowingly helped them buy, can be fined up to $10,000 on summary conviction, and a court can order the property sold on application. In that forced sale, the non-Canadian who bought it cannot recover more than they originally paid, which can mean a loss if the property’s value has changed since closing. A real estate agent, lawyer, or mortgage broker who knowingly assisted the purchase can face liability of their own. The ban’s design puts the financial risk on completing a purchase the buyer wasn’t eligible to make, not just on the paperwork around it.
Clearing the federal ban is the first test, not the only one, and the Non-Resident Speculation Tax waits on the other side of it for most non-Canadian buyers. Once you know where you stand, browse current Toronto listings or read our guide to the NRST and MNRST for what the purchase costs from there.