The Foreign Buyer Ban in Canada blocks most non-citizens from buying residential properties in Toronto until 2027. That includes houses, condos, and low-rise buildings within the urban census zones. Younger investors from overseas are often surprised to find they can’t legally buy a Toronto condo unless they meet specific conditions.
Who can still buy:
· Temporary workers with over 183 days left on a valid Canadian work permit
· International students who have lived in Canada at least 244 days a year for the past five years
· Refugees and spouses of Canadian citizens
There are loopholes. Apartments in buildings with five or more units are not covered by the ban. Nor is vacant land zoned for residential use. Rural and some vacation areas also fall outside census metro zones.
Tax Burdens Add Up Fast
Toronto applies an Ontario Non-Resident Speculation Tax of 15%. Starting January 2025, a new municipal tax adds another 10%. These two combine to a 25% tax added to the purchase price.
On a $1 million property, that’s $250,000 in extra costs—due at the time of purchase. These taxes apply even if the property is bought through a corporation, trust, or nominee buyer controlled by a foreign entity.
High-value homes above $2 million are hit further, with a 2.5% land transfer tax. Vacancy tax of 3% applies unless the home is regularly rented out or used by a tenant.
Financing Roadblocks
Canadian banks ask for at least a 35% down payment from foreign buyers. Proof of income from their home country is required. Most lenders ask for two years of foreign tax returns and an international credit report.
Interest rates for non-residents are usually 1.5 to 2 percentage points higher than the domestic average. For a five-year fixed mortgage, that means rates between 5% and 6.5% by mid-2025.
Currency shifts matter. A 5% drop in the Canadian dollar could cost a foreign buyer tens of thousands. Many use forward contracts through foreign exchange platforms to lock in better rates.
Location Loopholes and Investment Workarounds
Buying a house in Toronto may be blocked under the federal foreign buyer ban, but workarounds exist for those willing to adjust their strategy. Some investors are turning their attention to mixed-use buildings with retail space or to recreational properties in places like Muskoka. Others target buildings with five or more units, which fall outside the ban’s scope.
Foreign buyers also study areas under less scrutiny. By comparing listings in Mississauga, Vaughan, and outer suburbs to central Toronto homes for sale, many investors avoid restrictions while still gaining access to high-demand markets.
Property Types Still Open
Some investors have shifted their focus:
· Recreational homes in Muskoka saw a 22% increase in foreign purchases. Median prices reached $1.2 million.
· Mixed-use commercial buildings remain completely legal to buy. These saw a 19% foreign acquisition jump in quarters near Eglinton due to public transit expansion.
· New pre-construction condos sold before the January 2023 ban took full effect are still applying older regulations. Some offshore buyers continue to gain ownership by using proxy buyers or numbered companies.
Student Ownership Path
Foreign students enrolled full-time in Canada for two years can buy a home. They’re capped at $500,000 in home value. Most student investors focus on areas close to major schools:
· 70% of student-owned condos are within two kilometers of University of Toronto or Toronto Metropolitan University.
They often use parental funding and secure financing back home. Many buyers turn to smaller units in high-rent areas for long-term rental gains if the student leaves Canada later.
Rental Workarounds
Properties must be used or rented out. Investors unable to live in their units have turned toward renting them. About 4% to 6% returns are common downtown. Property management companies handle leasing, maintenance, and tenant relations.
Rent control does not apply to new construction. That makes it easier to bump rent year-to-year on listings built after 2018. Vacancy rates for downtown condos are low—around 2.1%.
Proxy Buying and Shadow Flipping
Some foreign buyers use friends or relatives who are Canadian residents to buy housing on their behalf. It’s risky, but it has occurred, especially in pre-construction sales.
Assignment sales—selling the contract to purchase a condo before the unit is completed—more than doubled in suburbs like Vaughan. Around 15% of foreign-owned units in these areas were sold within six months of original purchase.
Technology in Transactions
A growing number of foreign buyers now use blockchain tools. Over 18% of these transactions in 2024 switched to smart contracts, reducing paperwork delays. Title registry done through platforms such as Propy shortens the closing time.
AI tools used by brokerages now estimate costs with high accuracy. Realosophy’s buyer calculator includes land taxes, vacant home taxes, capital gains withholding, and legal fees. Many international buyers say it’s a starting point in comparing one purchase to another.
Where Foreign Ownership Is Concentrated
Foreign buyers still play a role in high-price areas. CMHC data shows:
· $4.1 billion in foreign purchases happened across Toronto in 2024
· 8.7% of home sales traced back to non-residents
· Bridle Path, CityPlace, and Yorkville attract the highest levels of offshore ownership
Some of these buyers are permanent residents who started under international investor programs, such as the Start-Up Visa Program. A $200,000 investment in a Canadian business can open a path to residency—and property buying rights.
Condo Stats and Occupation Rates
Condo units downtown keep attracting non-resident interest. In 2024:
· Condo units averaged $689,599, down 2.9% from the previous year
· 97% of downtown condos stayed rented, leaving limited supply for new entrants
· 38% of pre-construction condos were sold to offshore investors before January 2023
Most of these units are then leased out. Ranee Management and other firms handle these rentals for absentee owners.
Off-Market Buying Through Social Channels
Some foreign buyers use Chinese-language forums and WeChat groups to access condo listings outside public portals. Mandarin and Cantonese-speaking real estate agents are in demand, especially among investors targeting Richmond Hill or Markham.
Brokerages like 51Toronto specialize in managing leads through these private networks—sometimes unlocking deals before they hit the open market.
