Canada Plans to Extend Foreign Buyer Ban to 2029 With New Exemption

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On November 5, 2026, the federal government tabled Budget 2026: Masters of Our Destiny (“Budget 2026”), which includes a plan to extend the existing prohibition on non-Canadians purchasing residential property in Canada for an additional two years, to January 1, 2029. The proposed extension includes a carve-out for new residential properties.

Recap of Foreign Buyer Ban

The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) originally came into effect on January 1, 2023, for an initial two-year period. In 2024, the federal government extended this ban for an additional two years, expiring on January 1, 2027.

Our previous articles detailing the Act are listed below:

The Act generally prevents non-Canadians from purchasing residential property in Canada. The Act and its associated regulations define “residential property” as a house or building with not more than three dwelling units or a unit in a semi-detached house, rowhouse or condominium. The ban does not cover Canadian residential property outside census metropolitan areas and census agglomerations.

There are existing exemptions under the Act for certain temporary residents, protected persons under the Immigration and Refugee Protection Act and non-Canadians living with a Canadian spouse. If an individual or entity is found to be in violation of the foreign buyer ban, they may be found guilty of an offence punishable on summary conviction and liable to a fine of up to $10,000, and a court of competent jurisdiction may also order that the property be sold.

Latest Extension and Proposed Exemption

The latest budget from the Canadian government proposes to extend the ban on foreign purchases of existing residential properties for a further period of two years, to January 1, 2029. In addition, and perhaps more importantly, the federal government has announced that there will be a specific exemption for “new residential properties.”

According to Budget 2026, the proposed second extension of the foreign buyer ban aims to keep existing housing affordable and available to Canadians. By allowing non-Canadians to purchase “new residential properties,” the stated intent from the federal government is to encourage investment in new housing supplies while seeking to ensure affordability as it relates to existing properties. This carve-out aligns with what policymakers have been advocating for in recent years and reflects a similar approach taken in Australia.

Potential Implications

It is not yet clear what will, or will not be, categorized as a “new residential property.” However, the federal government has indicated that new legislation will be proposed and a regulatory process launched “in short order,” meaning the details of the proposed changes are still being finalized. We now eagerly await that subsequent announcement and proposed legislation to better understand the full implications of the proposed exemption.

In any event, while the proposed exemption is a material shift for the federal government, there remain initiatives from provincial and municipal governments to discourage investment in the housing supply by non-Canadians. This includes, for example, the similar non-resident speculation tax regimes that continue to exist at this time in Ontario and British Columbia, in addition to the City of Toronto’s municipal non-resident speculation tax – none of which (at this time) have any exemptions for new residential construction. As a result, it remains to be seen what consequences the federal government’s exemption will have on investment in new housing supplies.

The Real Estate Group at Aird & Berlis LLP will continue to monitor updates related to the foreign buyer ban, and we will respond with commentary on any proposed legislation. Please contact the authors or a member of the group if you have questions or require assistance.