Foreign Buyer Ban Extended to 2029, New Homes Exempt: What Budget 2026 Means for Toronto Owners and Builders

Budget 2026, tabled in Ottawa on November 5, 2026, proposes to keep the federal ban on foreign buyers of existing homes for two more years, to January 1, 2029, and to let foreign buyers purchase new homes. If you own a house in Toronto and wonder whether this changes who might buy it, or you build multiplexes and wonder who could buy your units, here is what the proposal says, what it leaves alone, and the help new homes already get.

What the budget proposes

The passage is in Chapter 3 of the Budget 2026 document. It "proposes to extend the ban on foreign purchases of existing residential properties for two years, to January 1, 2029, while exempting new residential properties." The government says this would keep "the vast majority of the market available for Canadians, while unlocking additional investment in new housing supply," and that it "will propose legislation and launch a regulatory process on this change in short order."

So nothing has changed yet. There is no bill, no start date, and no definition of a "new residential property". It could mean a home sold before it is built, a home nobody has lived in, or a home finished after a certain date. I would not change a plan on the strength of that phrase until the wording is published.

What the law says today

The ban started on January 1, 2023 and was first set to end on January 1, 2025. The Department of Finance extended it on February 4, 2024 to January 1, 2027. That is the end date in law until Parliament passes a new one.

Section 2 of the Prohibition on the Purchase of Residential Property by Non-Canadians Act defines what the ban covers:

• a detached house or similar building "containing not more than three dwelling units"
• a semi-detached house, rowhouse unit, residential condominium unit or similar unit

A non-Canadian is a person who is not a Canadian citizen, not a permanent resident and not registered under the Indian Act, plus some companies they control. The fine is up to $10,000.

Two exceptions in the regulations matter for the people I work with. A non-Canadian may buy residential property "for the purposes of development". And a work permit holder may buy one home if the permit has "183 days or more of validity remaining" on the day of purchase.

If you are selling your house to a builder

Two buyers look at the same house. A family prices the house. A builder prices the lot and how many homes it could hold. Under the rules today, the family buyer must be a Canadian citizen, a permanent resident or fit an exception. The builder can be anyone, including a non-Canadian, because a purchase for development is allowed.

The budget leaves both of those in place. Your house is an existing home, so under the proposal it stays inside the ban until January 1, 2029 for buyers who plan to live in it. A builder who buys it to develop was never blocked by the federal ban.

One provincial cost can apply to a foreign buyer. Ontario's Non-Resident Speculation Tax is 25% on the purchase of an interest in residential property anywhere in Ontario by a foreign national, a foreign corporation or a taxable trustee. The federal budget does not change it. Where it applies, a foreign builder has to pay it on top of the price, which lowers what that builder can offer for your land.

My post on how builders price land walks through the rest of that calculation.

If you build and sell new homes

The new-home exemption is the part of the budget that could matter most to a small builder. Under the Act, a single condo unit in a new multiplex is covered by the ban today. If the exemption covers new condo units, a builder could sell some of them to buyers who are not citizens or permanent residents.

This section is my own view. I would not count on that yet. The definition of "new" will decide everything, and a foreign buyer still pays the 25% Ontario tax on top of the price. Plan your sales and your lender's presale numbers around Canadian buyers until the bill and the regulations are published.

A whole building with four or more homes, bought as one property, is outside the Act's definition today. That is unchanged.

Financing changes for small builders from February 2027

The budget has a second housing measure, and in my view small builders will use it more than the exemption. It says new mortgage insurance rules for "missing middle" homes come into effect on February 1, 2027. The budget describes them this way:

• Insured construction financing for newly built three- and four-unit homes, for up to 90% of the property's value.
• No maximum property value, and no requirement for the builder to live in one of the units.
• Once the home is built, the builder can keep it and rent out all four homes with an insured mortgage of up to 30 years, or sell the homes to individual buyers.
• Private mortgage insurers may insure loans on five- to fifty-unit residential properties.

The budget's own example is a $3 million fourplex, which does not qualify under the current rules because of the $1.5 million cap and the rule to live in a unit. For an owner, more builders with access to financing can mean more builders able to make an offer on a lot that fits a fourplex. My multiplex zoning guide explains how many homes a lot can hold.

Tax relief on new homes for Canadian buyers

The people who buy a new home in Toronto today can get two kinds of tax relief, and both affect what they can pay for a new unit.

The federal first-time home buyers' GST rebate returns all the GST, or the federal part of the HST, on a new home up to $1 million, up to $50,000, and shrinks to zero at $1.5 million. The Canada Revenue Agency says the buyer must be 18 or older, a citizen or permanent resident, and must not have lived in a home they or their spouse owned in the year of the purchase or the four years before. The agreement with the builder must be signed on or after March 20, 2025 and before 2031. Bill C-4, which carries the rebate, received royal assent on March 12, 2026.

Ontario adds its own relief. The province's page on the Ontario New Home Affordability Payment says eligible buyers could save up to $130,000 through temporary HST relief on new or substantially renovated homes. It comes in two parts: an enhanced rebate of up to $80,000 of the provincial part of the HST, and a payment of up to $50,000 for the federal part. Together they relieve the full 13% HST on homes valued up to $1 million. The Ministry of Finance's March 25, 2026 briefing says the expanded relief covers purchase agreements signed from April 1, 2026 to March 31, 2027, for a home used as a primary residence or a residential rental property.

The budget itself says the federal government is working with provinces to cut taxes, fees and development charges on housing, "reducing the cost of a new home by up to $200,000 in Ontario, for example." My post on the development charges exemption for multiplexes covers the City side of that.

Questions to ask before you decide

• Is my buyer likely to live in the house, or to build on the lot?
• If a builder is buying, will the Ontario 25% tax apply to them?
• Would my lot fit a three- or four-unit home that qualifies for the new insured financing in 2027?
• If I am building to sell, how many of my buyers could use the GST rebate or Ontario's HST relief?
• Am I making any decision that depends on the definition of a "new" home?

What would a builder see on your lot? If you want to talk it through, see how I work with sellers and developers, or reach me through the contact page or at 416-636-6800.

Planning and development potential is property-specific and subject to zoning, approvals, site conditions, municipal review and other due diligence.

Sources

All pages opened on November 5, 2026 (PT).

• Department of Finance Canada, Budget 2026, Chapter 3 and the legislative annex: the proposed extension to January 1, 2029, the new-home exemption, the missing middle mortgage insurance rules from February 1, 2027, and the Ontario example.
• Department of Finance Canada, two-year extension to the ban on foreign ownership of Canadian housing (February 4, 2024): the end date of January 1, 2027.
• Justice Laws Website, Prohibition on the Purchase of Residential Property by Non-Canadians Act: the definitions and the $10,000 fine.
• Justice Laws Website, Prohibition on the Purchase of Residential Property by Non-Canadians Regulations: the development and work permit exceptions.
• Ontario, Non-Resident Speculation Tax: the 25% rate since October 25, 2022.
• Canada Revenue Agency, First-time home buyers' GST/HST rebate: who can apply: the buyer test and the March 20, 2025 agreement date.
• Parliament of Canada, Bill C-4: royal assent on March 12, 2026.
• Ontario, The Ontario New Home Affordability Payment: the up to $130,000 relief and its two parts.
• Ontario Ministry of Finance, Expanding Ontario's HST Rebates for New Homes (media briefing, March 25, 2026): the April 1, 2026 to March 31, 2027 agreement window.

Frequently asked questions

Is the foreign buyer ban extended to 2029?

Budget 2026, tabled on November 5, 2026, proposes to extend the federal ban on foreign purchases of existing homes to January 1, 2029. It is a proposal. Until Parliament passes a bill, the Prohibition on the Purchase of Residential Property by Non-Canadians Act still ends the ban on January 1, 2027, the date set in February 2024.

Can a foreign investor buy a Toronto house to build a multiplex?

Yes, under the rules in force today. The regulations under the Prohibition on the Purchase of Residential Property by Non-Canadians Act allow a non-Canadian to buy residential property for the purposes of development. Ontario's 25% Non-Resident Speculation Tax can still apply to a foreign buyer of residential property in Ontario, so the buyer should get tax advice first.

Does the foreign buyer ban apply to a building with four or more homes?

No. Under section 2 of the Act, the ban covers a detached house or similar building with not more than three dwelling units, plus semi-detached houses, rowhouse units and condominium units. A whole building with four or more dwelling units bought as one property falls outside that definition, although a single condo unit inside it is covered.

What is Ontario's Non-Resident Speculation Tax?

It is a provincial tax on foreign nationals, foreign corporations and taxable trustees who buy an interest in residential property anywhere in Ontario. The Ontario government's page says the rate has been 25% since October 25, 2022. The federal budget does not change it, and it applies whether or not the federal ban applies.

What changes for multiplex construction financing on February 1, 2027?

Budget 2026 says new mortgage insurance rules start on February 1, 2027. A builder of a newly built three- or four-unit home can get an insured loan for up to 90% of the property's value, with no maximum value and no rule to live in a unit. Private insurers may also insure loans on five- to fifty-unit residential properties.

How much is the first-time home buyer GST rebate on a new home?

Up to $50,000. The federal rebate returns all the GST, or the federal part of the HST, on a new home up to $1 million and shrinks to zero at $1.5 million. The Canada Revenue Agency says the agreement with the builder must be signed on or after March 20, 2025 and before 2031.

Can a non-Canadian buy a Toronto home with a Canadian spouse?

Yes. The Prohibition on the Purchase of Residential Property by Non-Canadians Act does not apply to a non-Canadian who buys residential property with a spouse or common-law partner who is a Canadian citizen, a permanent resident or registered under the Indian Act. Ontario's Non-Resident Speculation Tax has its own rules, so check those separately with a lawyer.

What HST relief does Ontario give on new homes in 2026?

Ontario's page on the New Home Affordability Payment says eligible buyers could save up to $130,000 through temporary HST relief on new or substantially renovated homes. It comes in two parts, an enhanced rebate of up to $80,000 of the provincial HST and a payment of up to $50,000 for the federal part, relieving the full 13% HST on homes up to $1 million.

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