Updated September 2026
If you are a foreign national, international student or temporary resident waiting for Canada’s Foreign Buyer Ban to expire on January 1, 2027 before purchasing a home in Ontario, you may want to reconsider your strategy.
Many prospective buyers assume that once the Prohibition on the Purchase of Residential Property by Non-Canadians Act expires, foreign purchasers will once again be free to buy resale homes throughout Toronto and Ontario. That is far from certain.
Even if the existing federal prohibition expires as presently scheduled, Ottawa is considering what should replace it. At the same time, Ontario and the City of Toronto have their own foreign-buyer taxes that operate entirely independently of the federal prohibition.
In other words, January 1, 2027 should not be treated as an automatic reopening of Ontario’s resale housing market to foreign buyers.
What Is Supposed to Happen on January 1, 2027?
Canada’s federal foreign-buyer prohibition came into effect on January 1, 2023. Parliament subsequently extended its scheduled repeal so that, under the legislation currently in force, the Act is due to be repealed on January 1, 2027.
However, the expiry of the current Act does not prevent the federal government from adopting a replacement regime.
That distinction is crucial.
1. Canada Is Considering a Different Approach to Foreign Buyers
The federal government has been considering what foreign-investment rules should apply after the existing prohibition expires.
One model receiving attention is Australia’s approach to foreign residential investment. Housing Minister Gregor Robertson has identified aspects of the Australian framework as worthy of consideration, particularly policies that direct foreign capital toward new housing supply and rental development rather than established resale homes.
Under an Australian-style approach, Canada could potentially permit greater foreign investment in areas such as newly constructed housing, purpose-built rental housing, redevelopment projects and development opportunities. While continuing to restrict foreign purchasers from competing with domestic buyers for existing houses and condominium units.
No such Canadian replacement legislation has yet been enacted. Therefore, a foreign buyer should not make a purchase strategy today based on an assumption that detached homes, townhouses and resale condominium units will automatically become available to foreign purchasers on January 1, 2027.
It is also worth noting that Canada’s current rules already contain important exclusions and exceptions, including acquisitions for development purposes. The discussion for 2027 is therefore about what the next overall framework may look like, not simply whether the current ban will disappear.
2. The Federal Ban Is Only One Part of the Problem
Even if Ottawa allowed the existing prohibition to expire without replacing it, Ontario’s Non-Resident Speculation Tax (NRST) would not automatically disappear.
Ontario currently imposes a 25% NRST on applicable purchases of residential property anywhere in Ontario by foreign nationals, foreign corporations and certain taxable trustees. The tax is imposed in addition to Ontario’s regular Land Transfer Tax.
For property located in the City of Toronto, there is another layer.
Effective January 1, 2025, Toronto imposes a 10% Municipal Non-Resident Speculation Tax (MNRST) on applicable purchases by foreign buyers. It is payable in addition to Toronto’s Municipal Land Transfer Tax.
That means an applicable foreign purchaser buying residential property in Toronto can currently face 35% in additional foreign-buyer taxes.
And that is before the ordinary Ontario and Toronto land transfer taxes are considered.
This illustrates why the expiry of the federal prohibition alone may do very little to make a Toronto resale purchase financially practical for many foreign nationals.
3. Permanent Residence Can Change the Analysis Significantly
A Canadian permanent resident is not a “foreign national” for Ontario NRST purposes and is not a “non-Canadian” caught by the federal prohibition in the same manner as a foreign national.
For many prospective buyers, obtaining permanent resident status before purchasing may therefore be far more significant than simply waiting for January 2027.
There may also be an NRST rebate where an eligible foreign purchaser becomes a Canadian permanent resident within four years of the purchase, provided all of the applicable statutory requirements are satisfied. However, the problem of coming up with NRST payment upfront at the time of the purchase is challenging for most buyers.
For the Ontario NRST rebate, the application generally must be submitted within 180 days after becoming a permanent resident.
Toronto also provides a potential MNRST rebate where an eligible foreign national becomes a permanent resident within four years. Toronto generally requires the rebate application within 90 days after permanent residence is obtained, together with additional ownership and principal-residence requirements.
These rebates should not be viewed as automatic. Eligibility depends on the particular facts, including ownership structure and occupancy requirements. The strict application deadline is also important, as missing it may result in the loss of an otherwise available rebate.
4. Work Permit Holders Need to Look at Two Different Sets of Rules
A common misconception is that every work permit holder is prohibited from buying a home under the federal foreign-buyer legislation. That is not correct.
Under the current federal regulations, an eligible work permit holder may purchase residential property if, among other requirements:
- the purchaser has at least 183 days remaining on the work permit or work authorization on the date of purchase; and
- the purchaser has not purchased more than one residential property.
However, qualifying for an exception from the federal prohibition does not automatically eliminate Ontario’s 25% NRST or Toronto’s 10% MNRST.
Those are separate tax regimes with their own exemptions.
Ontario’s existing NRST exemptions include certain Ontario Immigrant Nominee Program nominees, protected persons and qualifying purchases involving a spouse who is a Canadian citizen, permanent resident, nominee or protected person. Simply holding a work permit is not, by itself, a general NRST exemption.
This is why a buyer’s immigration status needs to be reviewed alongside the proposed property’s location and ownership structure before an Agreement of Purchase and Sale becomes firm.
5. International Students Face Particularly Narrow Rules
International students should also be cautious about assuming that they cannot purchase until 2027 or that they automatically can.
The present federal regulations contain a limited exception for qualifying international students. Among other conditions, the purchaser must generally have filed Canadian income tax returns for each of the previous five taxation years, have been physically present in Canada for at least 244 days in each of the previous five calendar years, purchase a property for no more than $500,000, and not have purchased more than one residential property.
In today’s GTA housing market, the $500,000 purchase-price limitation alone makes this exemption impractical for many buyers.
Ontario’s former NRST rebates specifically available to certain international students and foreign workers have also been phased out.
6. Do Not Confuse “Allowed to Buy” With “Exempt From Tax”
This is perhaps the most important point.
There are three separate questions that should be asked before a foreign national signs an Ontario real estate agreement:
First: Are you legally permitted to purchase the property under the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act?
Second: Will Ontario’s 25% NRST apply?
Third: If the property is in Toronto, will Toronto’s additional 10% MNRST apply?
A purchaser can potentially be exempt from the federal prohibition and still owe a substantial foreign-buyer tax on closing. The reverse analysis may also change depending on immigration status, spousal status, nominee status, the nature of the property and the property’s location.
Should You Wait Until 2027?
There is no universal answer. However, simply waiting for January 1, 2027 on the assumption that Canada’s resale housing market will reopen to foreign purchasers is risky.
As of September 2026:
- the current federal Act is scheduled to be repealed January 1, 2027;
- the federal government has been considering a replacement approach rather than simply returning to the pre-2023 system;
- an Australian-style model directing foreign capital toward new supply has been discussed, but has not been enacted;
- Ontario continues to impose a 25% NRST;
- Toronto continues to impose an additional 10% MNRST; and
- obtaining permanent residence can fundamentally change a purchaser’s legal and tax position.
Waiting for 2027 is not, by itself, a real estate strategy.
For a foreign national planning to purchase an Ontario home, the more important questions are:
- What is your immigration status on the proposed closing date?
- Do you qualify for an exception from the federal prohibition today?
- Would Ontario NRST apply?
- Is the property located in Toronto and therefore potentially subject to the additional MNRST?
- Are you expecting to obtain permanent residence before closing?
- Could an NRST or MNRST exemption or rebate apply?
- Should your purchase be delayed, accelerated or structured differently?
These issues should be considered before signing a firm Agreement of Purchase and Sale, not a few days before closing.
At MBLAW Professional Corporation, our Real Estate and Immigration Law practices can assist purchasers in navigating the intersection between immigration status, foreign-buyer restrictions, land transfer taxes and Ontario real estate transactions.
If you are a work permit holder, international student, foreign national or prospective permanent resident considering purchasing property in Ontario, contact MBLAW before committing to the transaction so that the legal and tax implications can be reviewed in advance.
This article provides general information only and does not constitute legal, immigration or tax advice. Foreign-buyer legislation and tax rules are subject to change, particularly as January 1, 2027 approaches. Individual advice should be obtained based on your circumstances.
