A French citizen holding a temporary work permit in Canada wants to buy a condo in Montreal. He meets the exemption criteria of federal law, obtains a mortgage pre-approval, and then discovers at the time of signing that British Columbia applies a provincial surcharge on foreign buyers, which is absent in Quebec. This kind of surprise illustrates the reality of the Canadian market for non-Canadians: federal law sets a framework, but each province adds its own rules.
Real estate purchase in Canada by a foreigner: the work permit filter
The federal law prohibiting the purchase of residential properties by non-Canadians, which came into effect on January 1, 2023, and extended until 2027, prohibits individuals without Canadian citizenship or permanent residency from acquiring certain residential properties. The scope is narrower than one might think: only properties with fewer than four units located in a census metropolitan area are affected.
In practice, holders of a valid work permit are the main exception. To benefit from this, one must have resided in Canada and declared their income locally. The question of who can buy in Canada therefore primarily depends on immigration status and the type of permit held.
Outside major urban areas (Montreal, Toronto, Vancouver, and other census metropolitan areas), the prohibition does not apply. A foreigner without any permit can legally purchase property in a rural municipality or small town, a detail rarely highlighted in general guides.
Purchase conditions for foreign students in Canada: very restrictive criteria
General articles often mention that foreign students can buy housing. The reality is much more constraining. The amended regulation in 2024 imposes five cumulative conditions for a student to be exempt from the federal prohibition:
- Hold a valid study permit and be enrolled in a designated learning institution at the time of purchase.
- Have resided in Canada for at least 244 days per calendar year for five consecutive years prior to the transaction.
- Have filed tax returns in Canada for each of those five years.
- Purchase a property priced at no more than 500,000 Canadian dollars.
- Not own more than one single dwelling throughout the duration of the law.
These requirements render most foreign students ineligible until several years of presence in the territory. A recently arrived student simply will not be able to buy in an urban area, even with the necessary funds.
The cap of 500,000 Canadian dollars effectively excludes almost the entire residential market of Vancouver and a large part of Toronto’s market. In Montreal, some condos remain accessible below this threshold, but the choice is significantly reduced.
Mortgage for non-residents in Canada: down payment and declared income
Obtaining financing represents the real friction point for a foreign buyer. Canadian banks agree to lend to non-residents, but the conditions differ significantly from those offered to residents.
The required down payment far exceeds the usual minimum. Where a permanent resident can put down as little as 5% of the purchase price (for a property under a certain threshold), a non-resident will generally need to provide at least 35% of the price, sometimes more depending on the institution. Some specialized lenders go up to 50%.
Proving income poses another issue. Banks want income declared in Canada or, failing that, verifiable foreign income proof converted to Canadian standards. Self-employed individuals or investors living in France will need to provide French tax notices, bank statements over several months, and sometimes a letter from their employer or accountant.
Anticipated costs beyond the loan
In addition to the down payment, a foreign buyer must anticipate the welcome tax (transfer duties, calculated on the purchase price), notary fees (in Quebec) or lawyer fees (in common law provinces), and the property appraisal by a licensed expert. In British Columbia, a provincial surcharge is added for foreign buyers, which can represent a significant amount on a property in Vancouver.
Geographical areas and types of properties: where the prohibition really applies
The federal law targets census metropolitan areas and census agglomerations, which are the densest urban areas in the country. Outside these statistical perimeters, a foreigner can buy without restriction, even without a work permit or permanent residency.
Properties with four or more units are also exempt from the prohibition, regardless of their location. A rental building with five units in Toronto can therefore be acquired by a non-Canadian, while a duplex in the same city will be prohibited for them (unless exempt due to status).
For a French person considering a rental investment, this distinction opens up concrete possibilities. Medium-sized income properties located in secondary cities like Sherbrooke, Trois-Rivières, or Alberta municipalities outside Calgary and Edmonton remain accessible without constraints related to federal law.
Penalties for violations
Buying in violation exposes one to real sanctions. The court can order the forced resale of the property, and both the buyer and the professionals involved in the transaction (notary, broker) risk fines. Returns vary on the frequency of checks, but the legal risk exists, and the law provides mechanisms for reporting.
The Canadian real estate market remains open to foreigners, provided they correctly identify their status, the purchase area, and the type of property targeted. The federal prohibition law, despite its title, contains enough exceptions to allow an informed buyer to carry out their project successfully.