Moving to Canada is an exciting prospect for many people around the world, as the country is known for its rich cultural diversity, welcoming atmosphere, and high quality of life. Immigrants play a vital role in shaping Canada’s identity, with the temporary resident population reaching 3.02 million as of January 2025, accounting for 7.3% of the nation’s total population.
However, one of the most common questions among those considering relocating to Canada is whether they can buy property. Are there restrictions? What about down payments and mortgages? In this guide, we’ll cover the essentials you need to know, including the current laws, exemptions, and key considerations for buying property in Canada. Whether you’re looking for a vacation home or an investment, we’ll help you navigate the process.
Jump Ahead
- Foreign Buyer Ban
- Exceptions to the Foreign Buyer Ban
- Can Americans Buy Property in Canada?
- The Purchasing Process
Foreign Buyer Ban
Rules for foreigners buying property in Canada are largely shaped by the foreign buyer ban legislation. In response to concerns about housing affordability, the Government of Canada enacted the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect on January 1, 2023. This legislation prohibits non-Canadians from directly or indirectly purchasing residential properties in Canada until January 1, 2027.
Who Does the Ban Apply To?
The ban applies to all non-Canadians buying property in Canada who are not citizens, permanent residents, or temporary residents who meet specific criteria outlined in the regulations. The foreign buyer ban also includes corporations and entities that are not listed on Canadian stock exchanges and are controlled by non-Canadians.
Why the Foreign Buyer Ban Was Implemented
The primary objective of the foreign buyer ban is to address housing affordability challenges by curbing speculative purchases of residential properties by foreign investors. By limiting foreign demand in certain urban areas, the government aims to make housing more accessible and affordable for Canadian residents.
Exceptions to the Foreign Buyer Ban: Who Can Buy Property in Canada
While the Foreign Buyer Ban in Canada restricts non-Canadians from purchasing residential properties, there are several notable exceptions. These exceptions aim to ensure that specific groups of individuals and certain types of properties remain accessible.
One major exception is for purchases outside of Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs). CMAs and CAs are designated urban areas, which typically include major cities like Toronto and Vancouver. Properties outside these regions are not subject to the ban, offering foreign buyers the opportunity to purchase residential property in less densely populated areas.
Additionally, the ban does not apply to permanent residents, certain temporary residents (e.g., work permit holders, students), refugees, or diplomats. These individuals, including foreign nationals with valid Canadian visas, are exempt from the restrictions and can buy property in Canada.
Another important exemption is for vacation homes or recreational properties. While the ban prevents foreign buyers from acquiring residential properties for long-term living purposes, it does not apply to properties that are intended for occasional use or short-term stays, such as vacation homes.
Understanding these exceptions can help clarify who is eligible to buy property in Canada despite the broader ban targeting foreign buyers.
Can Americans Buy Property in Canada?
For Americans interested in purchasing property in Canada, it’s important to understand that buying Canadian real estate does not grant you legal immigration status. Simply owning property in Canada does not automatically allow you to stay in the country long-term. To legally reside in Canada, you must apply for permanent residency or secure temporary residency status through means such as a work permit, student visa, or other immigration programs.
It’s also crucial to note that obtaining legal status in Canada can be challenging without certain qualifications. For example, having a job offer in Canada, starting a business, or having close family connections can significantly improve your chances of obtaining legal status. If you don’t have these factors in place, you may face difficulty navigating Canada’s immigration system and purchasing a home.
In addition to immigration considerations, purchasing property in Canada as an American also comes with potential tax implications. Even if you reside outside the U.S., as a property owner, you may still be required to file taxes in both the U.S. and Canada. Tax laws regarding foreign property ownership can be complex, so it’s highly recommended that you research the topic thoroughly and consult a tax specialist to ensure you comply with both countries’ tax regulations.
The Purchasing Process
If you are exempt from Canada’s foreign buyer’s ban, here’s how the home-buying process works:
Gather Necessary Documents
You will need to provide proof of identity, legal immigration status (like a work or study permit or permanent residency), and financial documents to secure a mortgage. If you don’t have a Canadian credit history, you may need to provide additional information, such as a letter from your bank in your home country or an international credit report.
Save for a Down Payment
In Canada, the minimum down payment depends on the home’s price:
- Under $500,000: 5% down payment
- $500,000 – $1.5 million: 5% on the first $500,000, 10% on the remaining amount
- $1.5 million or more: 20% down payment
For more details, check Canada’s financial guidelines here.
Secure a Mortgage
The types of mortgages available to home buyers in Canada may be different from what you’re used to in your home country. Below are some key details about Canadian mortgages:
- Fixed-Rate Mortgages: Same interest rate for the term.
- Variable-Rate Mortgages: The Interest rate fluctuates with the market.
- Term Lengths: Typically three or five years
- Amortization Periods: Typically 25 or 30 years, depending on your down payment.
Understand the Housing Market
Depending on where you’re looking to buy, the housing market can be competitive. Understanding local housing market fluctuations can better help you navigate buying Canadian real estate and potentially secure a deal. For instance, home prices can vary greatly between rural and urban areas, with cities generally seeing higher prices. Be aware of these differences when choosing your property.
Plan for Closing Costs
In addition to the purchase price and down payment, you will need to budget for closing costs, which include legal fees, property inspections, land transfer taxes, and possibly insurance.
Understanding these steps can help you navigate the Canadian real estate market with confidence.
Making Informed Real Estate Decisions as a Foreign Buyer
Buying property in Canada as a foreigner, whether you’re an American or from another country, is definitely possible—but it comes with its own set of rules and considerations. From understanding the foreign buyer ban and its exceptions to navigating down payment requirements and mortgage options, it’s important to be well-informed before making any decisions.
By taking the time to research and consult with experts, you can make the home-buying process in Canada much smoother and more successful. Whether for investment, vacation, or future relocation, owning property in Canada can be a rewarding opportunity with the right knowledge and preparation.
Are you looking to move to Canada? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
