Foreign buyers could return to new builds as resale ban runs to 2029

Ottawa’s 2026 budget proposes to extend Canada’s ban on foreign purchases of existing homes by two years, to Jan. 1, 2029, while exempting newly built homes, according to the law firm Fasken’s reading of the budget tabled Nov. 5. The proposal answers a question this site raised in September, when we asked what would replace the ban before its scheduled Jan. 1, 2027 expiry.

The change is a proposal, not law. Fasken notes that the budget does not define a “new residential property” or say when the exemption would start. Daily Hive reports that the budget promises legislation and a regulatory process soon. Purchases of existing homes would stay prohibited, subject to the exemptions already in the Act, Fasken says.

The government’s stated case, as quoted by Daily Hive, is that the change would keep “the vast majority of the market available for Canadians” while drawing more investment into new supply.

The market backdrop explains the timing. Rennie, a real estate consultancy, counted more than 14,000 unsold new condominiums across Metro Vancouver at the end of June 2026, and only 1,340 new condo sales in the first half of the year, a record low for the region, according to Daily Hive’s report on Rennie’s fall market report. Rennie analyst Ryan Wyse has said the region’s condo market “isn’t really a pre-sale market anymore.”

Apartment buildings under construction with a tower crane, illustrative stock photo — Illustrative stock photo by Zulfugar Karimov via Unsplash. It does not show a project or property discussed in this article.

The Greater Toronto and Hamilton Area shows a different but related pattern. Urbanation reported 760 new condo sales in the third quarter of 2026, double the year-earlier total, but investment groups bought 339 of those units in bulk deals, or 45 per cent of the quarter’s sales, CP24 reported. Sales were still 78 per cent below the 10-year average for a third quarter, the report found.

Developers in both regions have lobbied for a loosening. Daily Hive reports they argue foreign buyers could help clear unsold condos and supply the presales lenders need before financing the next round of construction. The Hub reports that Australia already bars foreign purchases of established homes until mid-2029 while letting non-residents buy new dwellings.

Economists are split on whether the carve-out helps ordinary buyers. Brendon Ogmundson, chief economist at the B.C. Real Estate Association, told CTV News Vancouver the measure would help developers secure financing for new supply, The Hub reported. Yinnon Geva, an assistant professor at the University of Toronto, told CTV News the move looks aimed at keeping the development industry going and asked how it improves affordability, according to the same report. National Bank chief economist Stefane Marion has separately argued the ban deters foreign investment, Canadian Mortgage Professional reported.

How much foreign money would actually return is hard to gauge. The Hub, citing 2020 Statistics Canada data, reports that non-residents owned about 2.2 per cent of Ontario residential properties, but 13.6 per cent of new Vancouver condos and 7.7 per cent of new Toronto condos before the ban. Those figures cover different geographies and pre-date the ban, so they are not a forecast. The Hub also notes that the non-resident category includes Canadians living abroad. Taken together with the inventory numbers above, the pattern suggests the exemption targets the segment where foreign ownership was historically most concentrated and where unsold supply now sits. That is our reading of the data, not a finding by any of the sources.

Modern living room with a large window, illustrative stock photo — Illustrative stock photo by Prydumano Design via Unsplash. It does not show a property discussed in this article.

Provincial taxes would be untouched. The Hub notes that Ontario’s 25 per cent non-resident speculation tax and B.C.’s 20 per cent foreign buyers tax still apply. Public support for the ban has been broad: a Research Co. poll in April 2025 found 76 per cent of Canadians backed it, Daily Hive reports.

Three details will decide how much the change matters. The first is how the legislation defines “new”, including whether it reaches presale contracts, which The Hub says is the segment developers need most to unlock financing. The second is the effective date. The third is timing: under current law the ban ends Jan. 1, 2027, so legislation would need to pass before then to avoid a gap, a point ITC iLand’s analysis of the budget raises. For the wider budget, see our plain-language guide to Budget 2026.