Buying

Buying a Home in Toronto as a Non-Resident or Newcomer: The Foreign-Buyer Ban and the 25% NRST

Two separate laws govern non-Canadian buyers in Toronto and they are routinely confused: a federal ban that stops most non-Canadians from buying at all, and an Ontario tax of 25% on those who can. Whether either applies to you depends on your immigration status on closing day, not your nationality — and for many newcomers on work permits, neither applies. This guide separates the two and gives the path.

Updated October 22, 2026 · TORE.ca editorial

1. 1.The two laws, side by side

   • Federal — Prohibition on the Purchase of Residential Property by Non-Canadians Act: in force January 1, 2023, extended to January 1, 2027. Prohibits "non-Canadians" from buying residential property in census metropolitan areas and census agglomerations (all of Toronto and the GTA). A purchase in breach is still valid, but the buyer faces a fine up to $10,000 and a court can order the property sold.
   • Ontario — Non-Resident Speculation Tax (NRST): 25% of the purchase price on residential property anywhere in Ontario bought by a foreign national, foreign corporation or taxable trustee, payable with land transfer tax on closing. Province-wide at 25% since October 25, 2022.

   If the federal ban prohibits your purchase, NRST is academic. If you are exempt from the ban, NRST may still apply — or not, depending on the exemption. Work through the ban first, then the tax.

2. 2.Who the federal ban applies to, and who is exempt

   A "non-Canadian" is anyone who is not a Canadian citizen, a permanent resident, or a person registered under the Indian Act — plus corporations and entities controlled by such persons (3% or more foreign control). The ban covers detached, semi-detached, townhouse and condo units and vacant land zoned residential in CMAs and CAs; it does not cover buildings of four or more units, or recreational property outside those areas.

   Exemptions (after the March 27, 2023 amendments)

   • Work-permit holders: exempt if the permit (or other work authorization) has at least 183 days of validity remaining at purchase and you have not already bought a residential property while in Canada under the exemption. No tax-filing or work-history requirement since the 2023 amendment.
   • International students: exempt if enrolled in an authorized program at a designated learning institution, have filed Canadian tax returns for 5 of the last 6 years, were physically present in Canada 244+ days in each of the last 5 years, the price does not exceed $500,000, and you have not bought another property.
   • Refugees and protected persons; persons with temporary resident status fleeing international crises (e.g., certain Ukraine measures).
   • A non-Canadian buying with a Canadian citizen or PR spouse/common-law partner.
   • Diplomats and consular staff.
   • Development: purchases for the purpose of development, and publicly traded entities.

   Your lawyer will require a statutory declaration of your status at closing; lenders and brokerages also ask. A $500,000 price cap for students is well below Toronto condo prices, which is why most newcomer purchases in the city are by work-permit holders and permanent residents.

3. 3.Ontario’s 25% NRST: who pays

   NRST applies when any buyer on title is a "foreign entity" — an individual who is not a Canadian citizen or permanent resident, a foreign corporation, or a trustee for one — and the property has one to six residential units. It is 25% of the full purchase price, on top of both land transfer taxes, and it applies to the whole price even if the foreign buyer takes only a 1% interest. A work-permit holder exempt from the federal ban is still a foreign national for NRST.

   NRST exemptions (no tax)

   • Ontario Immigrant Nominee Program nominee at closing, buying a home to live in.
   • Protected person (refugee) at closing.
   • Buying with a spouse who is a Canadian citizen, PR, nominee or protected person — jointly, as a principal residence.

   NRST rebate (pay, then recover)

   • Permanent residence: if you become a permanent resident within four years of closing, you can apply for a full rebate with interest. You must have occupied the home as your principal residence within 60 days of closing and held it alone or with your spouse. Apply within 90 days of becoming a PR.
   • The former rebates for international students (2 years of full-time study) and foreign workers (1 year of full-time work) were eliminated for agreements signed on or after March 30, 2022.

   On a $900,000 condo the NRST is $225,000, payable in cash at closing in addition to $29,950 of land transfer tax. For a buyer with a PR application in progress, the practical question is whether it will be approved within four years — and whether you can fund $225,000 now against a rebate later.

4. 4.Mortgages for newcomers and non-residents

   • Newcomers (PR or work permit, in Canada under 5 years) with no Canadian credit history: the major banks and CMHC/Sagen newcomer programs accept 5–10% down with alternative credit evidence (12 months of rent and utility payments, international credit reports, a letter from a foreign bank). Insured mortgages require the home to be your principal residence and the usual $1.5M price cap applies.
   • Non-residents living abroad: 35% down is the norm, income verified from the home country, often a Canadian bank account with 12 months of payments on deposit, and rates slightly above prime. Not insurable.
   • Both: the stress test applies, and the lender will ask for the same statutory declaration of status your lawyer needs.
   • Property tax, condo fees and closing costs are the same for everyone; see the closing-costs guide. Add the NRST if it applies, and expect your lawyer to require it in trust before closing.

5. 5.Selling as a non-resident later

   If you leave Canada and later sell, the buyer must withhold 25% of the sale price (not the gain) and remit it to the CRA unless you obtain a clearance certificate (Form T2062) in advance — apply the day you list; processing takes months. The gain itself is taxable in Canada as a capital gain on taxable Canadian property, and the principal-residence exemption is available only for years you were resident in Canada. A non-resident landlord must also withhold 25% of gross rent monthly (or net rent with an NR6 election) while renting the property out. Toronto’s Vacant Home Tax (3% of assessed value) applies to any unit vacant more than six months — a common trap for owners abroad.

6. 6.The practical path for a newcomer

   • Confirm your status on the expected closing date: citizen or PR → no ban, no NRST. Work permit with 183+ days left → ban exempt, NRST applies unless a listed exemption fits. Study permit → ban exempt only under the $500K cap and conditions; NRST applies. Visitor → ban applies; do not buy.
   • If NRST applies and PR is in progress, budget the 25% as cash and plan the rebate application; if PR is more than four years away, the rebate is lost.
   • Buying with a Canadian or PR spouse removes both problems for a principal residence.
   • Get a lawyer who handles NRST regularly before you sign anything — the statutory declarations, trust requirements and rebate filings are not a job for a general practitioner.
   • Build Canadian credit from day one: a secured credit card, rent paid by traceable transfer, a Canadian bank account. It shortens the path to a standard mortgage.

Rules cited: Prohibition on the Purchase of Residential Property by Non-Canadians Act, S.C. 2022, c.10, s.235, and Regulations SOR/2022-250 as amended March 27, 2023 (work-permit 183-day exemption; student conditions and $500,000 cap; $10,000 penalty), extension to January 1, 2027 announced February 4, 2024; Ontario Land Transfer Tax Act s.2(2.1) and O. Reg. 182/17 (NRST 25% province-wide from October 25, 2022; exemptions; permanent-resident rebate; elimination of student/worker rebates for agreements on/after March 30, 2022); Income Tax Act s.116 (non-resident vendor withholding, T2062) and s.216/NR6 (non-resident rental withholding); CMHC and Sagen newcomer mortgage programs; City of Toronto Vacant Home Tax by-law. Immigration status is determined as of closing; obtain legal advice for your specific case.