The ban on non-Canadian buyers
The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect on 1 January 2023 and was later extended to 1 January 2027. It bars most people without citizenship or permanent residence, and companies they control, from acquiring residential property.
The regulations define residential property as buildings of up to three dwelling units, plus parts of buildings such as condominium units, located within census metropolitan areas or census agglomerations. Recreational homes in rural areas outside those zones therefore remain open to foreign purchasers.
Exemptions that matter for borrowers
Amendments in March 2023 exempted work permit holders with at least 183 days of validity remaining when they buy, limited to one property. Vacant land zoned for residential use and purchases for development were also released, and the corporate control threshold rose to 10 %.
Penalties for breaching the rules
A non-Canadian who buys in breach of the Act, or anyone who knowingly helps them, risks a fine of up to 10 000 dollars, and a court can order the property sold. Lenders therefore check status carefully before funding a purchase.
Provincial taxes on foreign buyers
Ontario charges a Non-Resident Speculation Tax of 25 % across the province, and British Columbia levies an additional property transfer tax of 20 % in specified areas. These sit on top of land transfer tax and must be paid in cash at closing.
Banks and lenders serving foreign nationals
Large banks focus on newcomers who have arrived with permanent residence or a work permit, while alternative lenders and brokers handle buyers living abroad. The table shows providers whose pages appeared in searches for Canadian non-resident and newcomer mortgages.
| Provider | Type | Typical client | What to confirm |
|---|---|---|---|
| RBC Royal Bank | Major bank | Newcomers with permanent residence or a work permit | Minimum deposit, accepted foreign credit history |
| Scotiabank StartRight | Major bank programme | Recent arrivals building Canadian banking history | Time in Canada required, insured versus uninsured |
| WealthNorth | Alternative mortgage broker | Non-residents and borrowers outside bank criteria | Lender fees, term length, renewal terms |
Who still qualifies
Eligible borrowers include work permit holders meeting the 183-day rule, newcomers who already hold permanent residence, Canadian citizens living abroad, and foreign nationals buying a cottage outside metropolitan and agglomeration areas. Investors without status buying city condos are excluded until the ban ends.
Deposits, rates and the stress test
Non-residents living abroad typically need at least 35 % down, because mortgage default insurance is not available to them. Newcomer programmes may accept smaller deposits with insurance. All borrowers face the federal stress test, which qualifies them at a rate above the contract rate.
Rates for foreign nationals are often close to standard pricing at major banks when the client lives in Canada, but alternative lenders charge more and add fees. Pricing varies by lender and province, so compare written offers and annual percentage rates side by side.
Documents lenders ask for
Expect a passport, the work or study permit or confirmation of permanent residence, an employment letter stating salary and start date, recent pay slips, bank statements tracing the deposit, and foreign credit reports or reference letters. Documents in other languages require certified translations.
How to apply step by step
- Confirm your status against the Act and the regulations before making an offer.
- Check whether the property lies inside a census metropolitan area or census agglomeration.
- Open a Canadian bank account and move the deposit early, keeping transfer records.
- Obtain a pre-approval from a bank or a licensed mortgage broker.
- Have a real estate lawyer or notary add an exemption clause and verify compliance.
- Arrange the appraisal, home insurance and funds for provincial taxes.
- Close the purchase and register the title through the lawyer or notary.
Interest-rate and currency risk
Canadian mortgages are usually fixed for terms of five years or less within a longer amortisation, so the rate resets at renewal. Borrowers paid in another currency also carry exchange-rate risk, which can make renewal at a higher rate doubly expensive.
Mistakes and red flags
- Signing a purchase agreement for a city condo before checking the work permit validity date.
- Assuming an exemption also covers a spouse buying alone.
- Forgetting the 25 % Ontario tax when budgeting a Toronto purchase.
- Paying a fee to an online agent who promises a mortgage despite the ban; licensed brokers do not sell exemptions.
- Choosing a short alternative mortgage term without a plan for renewal.
Checking a broker or lender
Mortgage brokers are licensed by provincial regulators such as FSRA in Ontario or the BC Financial Services Authority, while federally regulated banks are supervised by OSFI and FCAC. Search the provincial register before sharing passport copies or paying any fee.
Frequently asked questions
The following answers reflect the federal rules and common bank practice in 2026; provincial rules and lender policies may add further conditions.
Can a foreign student buy a home?
Some international students qualified under early exemptions with strict conditions, but most are excluded. Lenders also look for stable income, which students rarely have. Seek legal advice on the current regulations before searching for property.
Does the ban apply to Canadian citizens living abroad?
No. Citizens and permanent residents are not non-Canadians under the Act, wherever they live. They still face non-resident lending policies, including higher deposits when they earn income outside Canada and cannot obtain default insurance.
What happens after 1 January 2027?
The ban expires on that date unless the government extends it again, as it did in 2024. Buyers planning around the deadline should check federal announcements, because a further extension or new conditions would change their timetable.
Can a work permit holder renew the mortgage later?
Yes. The ban concerns purchases, not existing loans, so renewal at the end of the term is a credit decision by the lender. Holding permanent residence by then usually improves terms and opens insured refinancing options.
Useful organisations and resources
- RBC Royal Bank – Mortgages for newcomers — Major Canadian bank page for permanent residents and work permit holders buying a first home after arriving.
- Scotiabank StartRight — Newcomer banking programme from Scotiabank, including mortgage options for recent arrivals without Canadian credit history.
- WealthNorth – Non-resident mortgage Canada — Alternative mortgage broker arranging loans for non-residents and buyers outside standard bank criteria.
Official and legal references
- Prohibition on the Purchase of Residential Property by Non-Canadians Regulations (SOR/2022-250) — Official text of the federal regulations defining non-Canadians, residential property and exemptions to the purchase ban.
- CMHC – Amendments to the Prohibition regulations (2023) — Federal housing agency release explaining the 2023 changes, including the work permit and development exemptions.