A Quick Guide to Foreign Ownership

Right now, affordable housing challenges are impacting foreign ownership of Canadian housing across the country.  Here’s what you should know.

The Rules

Effective as of January 1, 2023, the Canadian federal government prohibits foreign commercial enterprises, and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada. Intended to end January 1, 2025, the government expanded the ban to January 1, 2027, to help prevent Canadians from being priced out of housing markets. 

Exemptions for the ban may apply to the following:

  • Individuals with temporary work permits
  • Refugee claimants
  • International students meeting certain criteria

What is a non-Canadian resident?

The government does not consider you a resident of Canada unless you live in the country for more than six months out of the year.


Even though non-residents are eligible for Canadian bank loans they do have different rules when it comes to payment. To receive financing for a home, Canadian residents, require a down payment between 5% to 20% based on the total price of the home. When you’re a non-resident, you must pay a 35% down payment. Mortgage companies will require non-residents to prove that they’re financially capable of paying the mortgage with proof of income and good credit.

Looking to make a strategic real estate move in Toronto? Here are some more articles to help you on your journey:


Land Transfer Tax

Non-residents are expected to pay the same amount in Land Transfer Tax as residents, but there are deductions that may be available to first-time buyers’ whether they’re residents or non-residents. There are also rebates available if you plan on living in the purchased property within nine months of the closing date.

Withholding Taxes

When selling a property as a non-resident there’s a ‘withholding tax’ in the amount of 25% that must be paid to the Canadian Revenue Agency within ten days of the closing date to receive a ‘certificate of compliance’ that proves payment. There are payment penalties owed if the money is not provided to the Canada Revenue Agency within the ten days. The penalties are as follows:

3% – 1-3 Days Late
5% – 4-5 Days Late
7% – 6-7 Days Late
10% – More than 7 Days Late

*If you’ve been penalized for a second time within one year, you’re eligible for an additional 20% penalty payment.

Once paid, the money is then held by the Canadian Revenue Agency until the following year when the seller can file a Canadian tax return and potentially obtain a refund from the taxes paid.

Non-Resident Speculation Tax (NRST) 

NRST is applied on the purchase or acquisition of an interest in residential property in Ontario that contains at least one and not more than six single family residences. Purchasers subject to NRST include:

  • Foreign nationals who aren’t Canadian citizens or permanent residents of Canada 
  • Foreign entities that are either foreign nationals or foreign corporations
  • A taxable trustee of a trust with at least one trustee that is a foreign entity or with no foreign entity trustees if a beneficiary of the trust is a foreign entity

The tax is currently charged at a rate of 25%, in addition to the general Land Transfer Tax (LTT) in Ontario.

Exemptions are available for registered transfers if the transferee is:

  • A nominee, a protected person or a spouse of a Canadian citizen 
  • A permanent resident of Canada, a nominee or a protected person 

Rebates are available in some situations where you become a permanent resident of Canada, or the taxes are either improperly paid or overpaid.

For in-depth details on the NRST click here

Finding a Toronto Realtor

It’s always important to work with a Realtor who understands your wants and needs and has a wide range of knowledge regarding different types of real estate. When picking a realtor as an International Buyer, it’s also important to make sure your realtor has experience and knowledge working with other International buyers. This will help make the process less challenging. Your realtor will also be able to refer you to many Canadian companies and professionals you’ll need who are specialized in dealing with non-residents (Lawyers, Accountants, Mortgage Companies, etc.).

Get in touch today, call 416.291.7372 or email us at hello@christinecowern.com with any questions or to set up a call. We’d love to work with you!


Would you like to know more about the process of becoming an international buyer in Canada?

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