Canada to allow foreign buyers to purchase new homes while extending ban on existing properties

OTTAWA · The federal government plans to extend its ban on foreign purchases of existing residential properties for two years but will allow non-residents to buy new homes. The measure, outlined in Budget 2026, would keep the ban in place until January 1, 2029. The government said the exemption for new properties is intended to unlock investment in new housing supply. It argued the move would protect affordability by keeping most of the market available for Canadians.

"This would help protect housing affordability by keeping the vast majority of the market available for Canadians, while unlocking additional investment in new housing supply," Budget 2026 explains. The existing foreign buyer ban is set to expire in less than two months. The budget document states Canada will "extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, while exempting new residential properties." The policy shift comes as new home sales in cities like Toronto are near record lows and developers are sitting on record inventory. Despite billions in tax incentives to stimulate construction, home prices remain near highs in most provinces and require nearly double the median household income to purchase. The government has boasted that its policies contributed to roughly 250,000 annualized new home starts in the first half of 2026, a figure 20 percent above the 2015-2019 average.

Data that originally led Ottawa to create the ban showed a concentration of foreign ownership in new condos. In 2020, almost one in seven new condos in British Columbia were owned by non-residents, the highest rate among four provinces studied. Non-residents also owned 11.1 percent of new condos in Nova Scotia, 10 percent in New Brunswick and 9.2 percent in Ontario. Most of these properties were in major cities.

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In Vancouver, non-residents owned 13.6 percent of new condos according to 2019 property records, compared to 7.7 percent in Toronto. Housing Minister Gregor Robertson, who was the mayor of Vancouver during its foreign buying boom, recently argued in favour of foreign capital in housing. In 2016, however, he criticized the province for not imposing taxes to slow foreign buying. "Middle-class Canadians being able to buy a house in Vancouver and Toronto, those days have probably passed because the [foreign buyer] interventions didn't come," said then-Mayor Robertson.

When Canada refers to "non-resident investment," it largely means Chinese investors, who represented roughly 70 percent of that demand. These buyers were historically driven by Canada's reputation for a stable financial system, education opportunities and capital flight. That dynamic has shifted, with Beijing advising elites to pull investments from Western countries and Canada tightening oversight on money laundering through real estate. Canadian banks have paid billions in fines for facilitating such transactions. Your Space Hamilton reported in October that a National Bank report warned of a record backlog of unsold new homes and called for policy changes to boost demand. The new budget measure aims to address that inventory by reopening the new home segment to foreign buyers, the same segment that initially sparked the ban.

With files from Better Dwelling