Canada's foreign buyer ban is once again making headlines, but this time, the federal government is proposing a significant change that could create new opportunities in the country's residential real estate market.
On November 5, 2026, the federal government introduced Budget 2026, proposing to extend Canada's foreign buyer ban on existing residential properties until January 1, 2029, while introducing an exemption for newly constructed homes.
For Toronto, where new condominium development remains an important component of housing supply, this proposal could be particularly meaningful.
It may provide an opportunity to attract international buyers to newly built homes while maintaining restrictions on purchases of existing properties.
However, the changes are not yet law, and important details remain to be determined.
Here's what international buyers, Canadian homeowners, and prospective purchasers of Toronto pre-construction condominiums should understand.
What Is Canada's Foreign Buyer Ban?
Canada's foreign buyer ban, officially known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, came into effect on January 1, 2023.
The legislation was introduced to restrict certain non-Canadian individuals and entities from purchasing residential property in designated Canadian housing markets, including Toronto and much of the Greater Toronto Area.
The prohibition generally applies to certain residential properties, including detached homes, semi-detached homes, townhouses, and condominium units, subject to the legislation's definitions, geographic restrictions, and exceptions.
The legislation was originally intended to remain in effect for two years. In February 2024, the federal government announced an extension to January 1, 2027.
Now, through Budget 2026, the federal government is proposing another two-year extension, taking restrictions on existing residential properties through to January 1, 2029.
Importantly, this latest extension and the proposed new-home exemption have not yet taken effect.
For a detailed explanation of the current restrictions, buyers can consult the Canada Mortgage and Housing Corporation's foreign buyer ban guidance.
What Is Changing Under the Proposed 2026 Foreign Buyer Ban Extension?
The most notable aspect of the federal government's proposal is the distinction between existing residential properties and newly constructed homes.
Rather than continuing the same restrictions across both categories, the government has proposed maintaining the prohibition on qualifying existing and resale properties while exempting new residential properties.
The stated objective is to protect access to existing housing for Canadians while allowing additional investment to support the construction of new homes.
This could represent a meaningful change for the Canadian housing industry, particularly in markets such as Toronto, where pre-construction condominium sales play an important role in financing and advancing new residential developments.
For international buyers interested in establishing a residence in Toronto or purchasing property for the future, the proposed exemption could create opportunities that are not broadly available under the current legislation.
Nevertheless, the final scope of the exemption will depend on future legislative and regulatory changes.
Can Foreign Buyers Purchase Pre-Construction Condos in Toronto?
This is likely to be one of the most important questions arising from the federal government's announcement.
The proposed exemption could eventually permit eligible non-Canadian purchasers to buy qualifying new residential properties, including certain pre-construction condominiums. However, a general exemption for pre-construction purchases is not currently in force.
The government has not yet clarified precisely how it intends to define a new residential property.
For example, questions remain about whether the exemption would apply to condominiums purchased before construction, newly completed suites that have never been occupied, or other categories of new housing.
The timing of a purchase is also important.
Under the current federal regulations, acquiring a legal or equitable interest in a residential property can constitute a purchase. Consequently, a pre-construction agreement signed during the existing prohibition cannot automatically be considered permissible simply because the property's anticipated closing date falls after January 2027.
Certain existing exemptions and exclusions may still apply depending on the buyer and the transaction.
For now, international purchasers should obtain qualified Canadian legal advice before entering into an agreement to purchase a pre-construction condominium.
Those interested in how developers structure new condominium purchases can explore our Toronto Pre-Construction Overview, which explains the general purchasing process, deposit structures, and considerations involved in buying a new development.
Why Could This Be Positive for Toronto's Pre-Construction Market?
Toronto's condominium development industry relies on a combination of end-user demand, project financing, and pre-construction sales to move new residential buildings forward.
When demand for pre-construction units is limited, developers can face challenges reaching the sales thresholds required to obtain financing and begin construction.
Opening qualifying new residential properties to additional international purchasers could help broaden the potential buyer pool.
This may provide developers with additional opportunities to achieve pre-sale targets, advance construction, and bring new housing supply to market.
From our perspective at Gerardi Real Estate, the proposed change represents a potentially constructive direction for the new-construction sector.
There is an important distinction between international capital directed toward creating additional housing and demand directed toward purchasing homes already available in the resale market.
The proposed policy appears intended to recognize that difference.
However, the eventual impact will depend on the final regulations, buyer demand, financing conditions, construction costs, and market conditions. The exemption would not guarantee stronger sales, higher property values, or the completion of any particular development.
New Condominium Opportunities Across Toronto
Toronto continues to offer a range of distinctive residential developments catering to different lifestyles, neighbourhoods, and buyer preferences.
Projects such as VALO Residences at 250 High Park Avenue, 1 Marlborough in Rosedale, and 8 Rosehill near Yonge and St. Clair reflect the diversity of the city's new-development market.
From boutique residences and heritage-inspired architecture to contemporary luxury condominiums, these projects highlight the opportunities available to purchasers seeking newly developed properties.
For buyers considering this segment of the market, understanding the differences between developments, construction timelines, purchase agreements, and potential future regulatory changes is essential.
Explore our selection of Toronto New Developments to learn more about the market.
The inclusion of any particular development does not mean that it qualifies under the proposed federal exemption. Eligibility will need to be determined once the final rules are established.
Do Foreign Buyers Still Pay Ontario and Toronto's Foreign Buyer Taxes?
Even if the federal government introduces an exemption permitting non-Canadians to purchase newly constructed residential properties, buyers must understand that federal purchasing restrictions and provincial or municipal taxes are separate matters.
Ontario and Toronto currently impose additional taxes on certain qualifying foreign purchasers.
Ontario Non-Resident Speculation Tax (NRST): 25%
Ontario applies a 25% Non-Resident Speculation Tax to certain residential property acquisitions involving foreign nationals, foreign corporations, or taxable trustees.
This tax generally applies throughout Ontario, subject to the applicable definitions, exemptions, and rebates.
More information is available through the Ontario Ministry of Finance's NRST guidance.
Toronto Municipal Non-Resident Speculation Tax (MNRST): 10%
Effective January 1, 2025, the City of Toronto introduced an additional 10% Municipal Non-Resident Speculation Tax on certain residential property purchases involving foreign buyers within the city.
Information about the tax can be found on the City of Toronto's Municipal Land Transfer Tax and Non-Resident Speculation Tax page.
Where both taxes apply, a foreign purchaser could face a combined 35% in additional non-resident speculation taxes on the purchase price, before ordinary provincial and municipal land transfer taxes and other applicable closing costs.
Purchases of new residential properties may also involve HST considerations, depending on the transaction and applicable rebates.
A future federal exemption from the foreign buyer ban would not automatically eliminate Ontario's 25% tax or Toronto's additional 10% tax.
This is an especially important consideration for international buyers evaluating the full cost of a Toronto property purchase.
Who Is Exempt From Canada's Current Foreign Buyer Ban?
Not everyone living outside Canada is considered a foreign buyer under the legislation.
Canadian citizens and permanent residents are not subject to the federal prohibition simply because they currently live abroad.
The legislation also provides exceptions for certain categories of purchasers, which may include qualifying temporary workers, protected persons, and non-Canadian individuals purchasing jointly with an eligible spouse or common-law partner.
Additional exemptions and exclusions apply to certain transactions and property types.
For example, a Canadian citizen residing overseas may have a very different legal purchasing position from a foreign national without Canadian citizenship or permanent resident status.
Similarly, certain individuals working in Canada under qualifying immigration authorizations may be permitted to purchase a residence under existing rules.
These situations must be evaluated individually, and exemptions from the federal prohibition do not necessarily provide exemptions from provincial or municipal taxes.
For international purchasers, confirming eligibility before selecting a property or signing an agreement should be an early step in the purchasing process.
What Does the Proposed Extension Mean for Canadian Homeowners?
For Canadian homeowners, the proposal is intended to maintain restrictions on foreign purchases of existing residential properties while potentially directing additional demand toward newly constructed homes.
If implemented, the ban would continue to limit purchases of qualifying resale homes by non-Canadians who do not meet an exemption.
For developers and the construction industry, the exemption could potentially help support demand for new housing.
Over time, additional development activity could contribute to housing supply and expand the range of options available to Canadian buyers.
However, it is too early to determine how the proposed changes may affect individual property values, neighbourhood demand, or resale market conditions.
Toronto remains a diverse market, and the factors influencing the value of a luxury condominium in Yorkville can differ considerably from those affecting a detached home in Etobicoke or a new residence in High Park.
For homeowners contemplating a sale and buyers evaluating their next purchase, property-specific market conditions remain far more useful than broad assumptions about future policy changes.
Our Toronto Luxury Condominium Collection offers a closer look at some of the city's established residential buildings and neighbourhoods.
Frequently Asked Questions About Canada's Foreign Buyer Ban
Has Canada's foreign buyer ban been extended to 2029?
Not yet under the November 2026 proposal. Budget 2026 proposes extending restrictions on existing residential properties until January 1, 2029. The proposal requires implementation through the applicable legislative and regulatory processes.
Can foreigners buy a pre-construction condo in Toronto in 2026?
There is no general exemption currently in force allowing all foreign nationals to purchase pre-construction condominiums. Existing exemptions and exclusions may permit particular transactions, but eligibility requires individual legal assessment.
Will foreign buyers be allowed to purchase newly built condos?
Budget 2026 proposes an exemption for new residential properties. Whether specific pre-construction agreements, completed but unoccupied units, or other new homes qualify will depend on the final rules.
Does the foreign buyer ban apply to Canadian citizens living overseas?
No. Canadian citizens are not treated as non-Canadians under the federal prohibition solely because they live outside Canada.
Will foreign buyers still have to pay the 25% Ontario tax?
The proposed federal exemption does not itself remove Ontario's NRST. Eligible transactions may remain subject to the 25% provincial tax and, in Toronto, the additional 10% municipal tax, unless an applicable exemption or rebate applies or the relevant tax laws change.
Looking Ahead: A Potential New Chapter for Toronto Real Estate
Canada's proposed approach to foreign ownership represents an important development in the discussion surrounding housing affordability, construction, and international investment.
Maintaining restrictions on existing residential properties while potentially allowing foreign purchasers to participate in new housing developments could create opportunities for Toronto's condominium sector.
For international buyers, it will be essential to understand when the proposed rules take effect, which properties qualify, and how the existing tax framework applies.
For Canadian homeowners and prospective purchasers, the announcement is another factor worth monitoring as Toronto's housing market continues to evolve.
At Gerardi Real Estate, Valerie and Michael Gerardi provide personalized guidance to buyers and sellers across Toronto and the Greater Toronto Area, with a focus on luxury residences, new developments, and pre-construction opportunities.
Whether you're an international purchaser exploring the Toronto market, a Canadian living abroad, or a local buyer considering a new condominium, we would be pleased to discuss your real estate goals and help you navigate the available opportunities.
Connect with Valerie and Michael Gerardi to arrange a private real estate consultation.
Disclaimer: This article is intended for general informational purposes only and does not constitute legal, tax, immigration, or financial advice. Information reflects the federal proposals and published rules reviewed as of November 13, 2026. Buyers should obtain independent advice from qualified Canadian legal and tax professionals before entering into a real estate transaction.