Key takeaways
- Immigration status, the property’s location and its type all affect the federal rules.
- Work-permit holders may qualify under an exception, but eligibility must be checked at the relevant time.
- Canadian tax residence does not by itself establish permission to buy.
- Provincial and municipal foreign-buyer taxes may still apply to a federally permitted purchase.
Who is considered a non-Canadian?
The federal Act generally treats an individual who is neither a Canadian citizen, a permanent resident nor a person registered as an Indian under the Indian Act as a non-Canadian. It also reaches certain corporations and entities, including some under non-Canadian control. The Act and regulations define the categories and exclusions. [1, 2]
A Canadian citizen living outside Canada is therefore in a different position from someone living in Canada on temporary status. Having a Canadian address, tax number, bank account or mortgage pre-approval does not answer the legal question.
Where several people are buying together, every purchaser’s position needs to be assessed. Buying through a corporation or placing title in another person’s name can raise issues about indirect acquisition and control rather than resolve them.
Which properties does the prohibition affect?
The rules focus on defined residential property. They cover many houses and individual condominium units, but do not apply identically to every building or every location. The regulations exclude residential property outside a census metropolitan area or census agglomeration. [2]
These are Statistics Canada classifications, not a casual distinction between “urban” and “rural.” A cottage-like property near a town may still fall within an affected area. Have the actual address checked rather than relying on its appearance or marketing description.
Property type matters too. The treatment of an individual condominium unit differs from the acquisition of an entire larger residential building. Development-related acquisitions and some transfers arising from events such as death or relationship breakdown have specific rules. [2]
Can someone with a work permit buy?
An exception may apply to a person holding a valid work permit, or otherwise authorized to work in Canada, who has at least 183 days of validity remaining at the time of purchase and has not already purchased residential property in Canada while the prohibition is in effect. [2]
That is not a blanket exemption for anyone who has ever worked here. Permit validity, the timing of the acquisition and the other requirements must be checked. A permit renewal that is still being processed can require advice about the person’s actual legal authorization and the wording of the regulations.
Send your lawyer the relevant permits and status documents before signing. Do not assume that being able to complete the mortgage application means you satisfy the statutory exception.
What about students, refugees and spouses?
There are other exceptions, but they have different conditions. The student exception includes demanding requirements relating to study, prior tax filings, physical presence, purchase price and previous purchases during the prohibition. Being enrolled at a Canadian school alone is insufficient. [2]
The rules also address protected persons, certain refugee claimants, people covered by specified humanitarian measures and qualifying purchases with a spouse or common-partner. These categories should be checked against the buyer’s documents and exact circumstances.
If you are relying on a spousal exception, tell your lawyer who will acquire the property and provide the information needed to assess both people. Do not treat a relationship description on a mortgage application as the full legal analysis.
If I qualify, will I avoid foreign-buyer taxes?
Not necessarily. The federal prohibition and Ontario’s NRST serve different purposes and use different tests. A temporary resident may qualify to buy under the federal work exception while still owing Ontario’s additional tax. Toronto’s municipal foreign-buyer tax can raise another separate question. [3, 4]
Ask for both answers before budgeting: Is this acquisition permitted, and what taxes apply? Permission to buy is not a tax exemption, and payment of tax does not make a prohibited acquisition lawful.
Can I just sign now and close after the ban ends?
Do not rely on that plan without advice. The rules address acquiring interests in residential property, and the timing of a binding agreement can matter. A later registration date does not necessarily make an earlier prohibited acquisition permissible. [1, 2]
The current scheduled end date is also not a promise that the law will remain unchanged. For a transaction involving temporary status or a future date, have your lawyer check the rules when the agreement is made and again where a relevant change occurs before closing.
About the author — Kubeskaran Navaratnam
Kubeskaran Navaratnam is the Managing Partner of iClosed and a lawyer licensed by the Law Society of Ontario (LSO #60539H, licensed since 2011). His practice is Ontario residential real estate, acting for buyers, sellers and lenders on resale, new-build and condominium closings across the Greater Toronto Area. His Law Society record can be verified at https://lsodirectory.lso.ca/en-US/licensee-detail/?lawsocietynumber=60539H. This article is general information about Ontario law and practice, not legal advice. It does not create a lawyer-client relationship. For advice on your own transaction, speak with a licensed Ontario real estate lawyer.
Sources
- 1. Justice Canada — Prohibition on the Purchase of Residential Property by Non-Canadians Act. — https://laws-lois.justice.gc.ca/eng/acts/P-25.2/FullText.html
- 2. CMHC — Federal prohibition and exceptions. — https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/consultations/prohibition-purchase-residential-property-non-canadians-act
- 3. Ontario — Non-Resident Speculation Tax. — https://www.ontario.ca/document/non-resident-speculation-tax
- 4. City of Toronto — MNRST information. — https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/municipal-land-transfer-tax-mltt-information/
This article provides general information about Ontario law and closing practice as of October 26, 2026. It is not legal or tax advice and does not create a lawyer-client relationship. Your agreement of purchase and sale, your lender’s instructions and your own circumstances control what applies to you. Rates, thresholds and rules change — confirm current figures before relying on them.