Canada moves to ease foreign homebuyer ban for new properties amid housing concerns

ASM, Philippine Canadian Inquirer
November 09, 2026

Photo courtesy: Global News

Canada plans to ease restrictions on foreign homebuyers by allowing them to purchase newly built residential properties. However, the proposed changes have raised questions about whether they will make housing more affordable for Canadians.

The federal government outlined the plan in Budget 2026, released on Thursday, November 5.

Under the proposal, foreign buyers would be allowed to purchase new homes. Meanwhile, the government would extend its existing ban on foreign purchases of resale homes until January 1, 2029.

Ottawa says the changes would attract investment in housing construction while protecting existing homes from additional foreign demand.

Why Canada wants to change the rules

Canada introduced its foreign homebuyer ban in January 2023 to address concerns about housing affordability and foreign investment in residential properties.

The restrictions were initially scheduled to last two years. However, the federal government later extended them until January 2027.

Budget 2026 now proposes another two-year extension for existing residential properties.

At the same time, the government wants to exempt newly built homes from the ban.

The proposed approach would allow foreign investment to support housing development without reopening the resale market to buyers covered by the restrictions.

The government plans to introduce legislation and begin the regulatory process to implement the changes.

However, the exemption has not yet taken effect, and Ottawa has not announced a start date.

Could foreign investment help build more homes?

Supporters believe the proposed exemption could help developers finance new housing projects.

In cities such as Toronto and Vancouver, developers have faced weaker demand for newly built condominium units.

Allowing eligible foreign buyers to purchase new properties could help developers sell completed units and secure advance sales for future projects.

Real estate agent Lucy Hua said additional buyers could help developers move forward with construction.

In comments reported by Canadian media, Hua explained that unsold condominium units can prevent developers from financing their next projects.

The approach is similar to Australia’s foreign investment rules, which generally direct foreign buyers toward new residential developments.

Supporters argue that this could increase housing supply without placing additional pressure on Canada’s existing homes.

Experts question the impact on affordability

However, not everyone believes the proposal will make housing more affordable.

Yinnon Geva, an assistant professor at the University of Toronto’s Institute for Management and Innovation, questioned whether encouraging more demand would help lower prices.

Geva raised concerns that the policy could primarily support developers rather than improve affordability for homebuyers.

Meanwhile, thousands of newly built condominium units remain unsold in major Canadian markets.

Although foreign investment could help developers sell these properties, it remains unclear how many overseas buyers would return.

Housing affordability also depends on factors such as construction costs, household incomes, borrowing rates and the availability of suitable homes.

As a result, allowing more foreign investment in new developments would not necessarily lead to lower prices for Canadian buyers.

Provincial foreign buyer taxes will remain

Even if Ottawa implements the exemption, foreign buyers may still face additional costs under provincial laws.

Ontario currently imposes a 25% Non-Resident Speculation Tax on certain residential property purchases involving foreign buyers.

British Columbia also applies an additional 20% property transfer tax to eligible foreign buyers in designated areas.

These provincial measures operate separately from the federal prohibition.

Therefore, exempting new homes from the federal ban would not automatically remove provincial taxes or other purchasing restrictions.

Foreign buyers would still need to meet applicable federal, provincial and local requirements.

What happens next?

The proposal forms part of Ottawa’s broader efforts to increase housing construction and address affordability concerns.

However, the government must first complete the legislative and regulatory process before the new exemption can take effect.

Until then, Canada’s existing foreign homebuyer restrictions remain in place, subject to exemptions already permitted under current law.

The federal government has not announced when the proposed exemption for newly built homes will begin.