Can Non-residents buy a home in Canada? 

How to Buy your First Home as a Non-Resident in Canada

There are multiple reasons to buy a home in Canada as a non-resident. It can be an investment vehicle, a holiday home or a status symbol, among other things. 

Canadian laws are clear on allowing non-residents to enter the real estate market. The country naturally attracts foreign investments in this sector as the tenth-largest economy- in nominal GDP.  

A Canada Mortgage and Housing Corporation (CMHC) and Statistics Canada report from 2019 reported non-resident participation in the domestic housing market as follows: 

  • The percentages of properties that had at least one non-resident owner in some of the most popular provinces were: 
    • British Columbia 6.2% (Vancouver 7.6%) 
    • Ontario 3.3% (Toronto 3.8%) 
    • Nova Scotia 6.2% (Halifax 4.3%) 
  • Condominium apartments had the highest proportion of non-resident participation. The percentage of condominiums with at least one non-resident owner was: 
    • 10.4% in British Columbia 
    • 6.1% in Ontario. 
    • These shares are higher still in the Vancouver (11.2%) and Toronto (7.6%) Census Metropolitan Areas (CMAs). 

Recently, foreign ownership of homes in prime urban areas became the latest target of government restrictions to curb rising home prices. The measures include a two-year ban on foreigners buying homes in Canada. 

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Who is a Non-resident? 

A non-resident homeowner is an individual whose principal residence is outside Canada. This includes Canadian citizens who maintain primary residences outside Canada. 

For tax purposes, the Canada Revenue Agency defines a Non-resident as an individual who: 

  • Does not have significant residential ties like a home, spouse, common-law partner or dependents in Canada and lives outside Canada throughout the year. 
  • Does not have significant residential ties in Canada and stayed in Canada for less than 183 days in a year. 
  • Is deemed a Non-resident of Canada under the Income Tax Act. 

Can a Non-resident buy a home in Canada? 

Yes, Canadian law allows non-residents to buy property in Canada.  

Do Non-residents pay taxes when buying a home in Canada? 

Yes, you are required to pay taxes like any normal Canadian citizen on top of special taxes imposed on non-resident owners of property in Canada. 

Taking the city of Toronto as an example, the Government imposes a Non-Resident Speculation Tax or NRST of 20% on the purchase or acquisition of residential property in Ontario by a non-resident. You are also required to pay a Land Transfer tax of 

As of 2022, Canada passed the Underused Housing Tax Act (UHT Act), which imposes an annual 1% tax on the value of a vacant or underused residential property owned by a non-resident. 

Buying a home in Canada 

The Canada Mortgage and Housing Corporation’s (CMHC) official guides address many concerns of a first-time buyer. The guide helps potential homeowners recognize their financial situation and make informed decisions. Once you’re ready, you can proceed with the following steps: 

  • Financing- Non-residents can access Canadian financing options for a mortgage. The terms may be altered according to your status and the bank. It is standard practice for banks to require a 35% down payment for non-residents. To qualify for a mortgage as a non-resident, you must have the following: 
    • A 35% down payment 
    • A reference letter from your bank 
    • An employment letter that confirms your income in Canadian or US dollars 
    • Bank statements 
    • A Canadian credit check 
  • Identifying the right home- Canada offers different types of homeownership models, such as: 
    • Freehold, where you own the building and the land. 
    • Condominium (strata) where you own your unit and share ownership of common areas with other unit owners. 
    • Leasehold, where you own the property but rent or lease the land from the city or other entities. 
    • Co-operatives, where you own a share of an entire building. 
    • Identifying the right model for your needs is necessary before you finance and buy property. 
  • Making an offer- This step involves you- the buyer, negotiating an offer to buy a listed property. The offer will include details such as your name and address along with that of the seller, the purchase price, the amount deposited, the closing date when you will take legal possession of the house, land surveys and the offer’s expiration date. 

The current situation around Non-residents buying homes in Canada 

There’s some trepidation bubbling beneath the surface in the Canadian real estate market. The BBC reported a 20% price jump in the housing market in 2021, which pushed the average price of the Canadian home to over CAD 817,000- more than nine times the household income. It prompted Canadian Prime Minister, Justin Trudeau, to propose a two-year ban on Foreigners buying homes to cool the housing market. 

With the Budget 2021, the Liberal Party of Canada also implemented the nation’s first national tax on non-residents and non-Canadian owners of vacant, underused housing to curb unproductive foreign ownership. 

What is the ‘Prohibition on the Purchase of Residential Property by Non-Canadians Act’? 

The Act, which comes into force on January 1st, 2023, restricts non-Canadians from directly or indirectly purchasing any residential property in Canada. 

Who is exempted from this Act?  

Certain exemptions for ‘non-Canadians’ under this Act are mentioned on the Justice Laws website. This Act does not apply to: 

  • Temporary residents who fall under the Immigration and Refugee Protection Act
  • A Protected person classified under subsection 95(2) of this Act 
  • A non-Canadian who purchases residential property with a spouse or common-law partner who is a Citizen of Canada. 
  • Foreign states purchasing residential property for diplomatic and consular purposes are exempted from this Act’s restrictions. 

What Prompted this Act?  

The Act is the Government’s response to soaring home prices. It is consistent with Prime Minister Trudeau’s campaign promise to make housing affordable for Canadians. 

What can Non-residents expect in the future? 

Non-residents who fall under this Act will be banned from entering the Canadian real estate market for the next two years. This will hamper any plans to buy a home in Canada in the foreseeable future.  

However, the housing market could improve in the future, and drastic measures like the Act could be rescinded in favour of foreign investment. 

The New Housing Price Index for August 2022 had the year-over-year home price rise at 6.9% nationally- the smallest increase since January 2021. 


Janggoulal Sitlhou

Janggoulal Sitlhou

Janggoulal Sitlhou is a content writer with SettleCanada. He is a Political Sciences graduate and a keen follower of international affairs and contemporary history. He has a background in publishing and regularly dabbles in writing and game development projects. Janggoulal currently writes on issues related to Canadian Immigration.