On November 5, 2026, the Government of Canada released Budget 2026. In it, the government proposes to extend the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Act”) for two more years, to January 1, 2029.[1] It also proposes to exempt new residential properties from the prohibition. Purchases of existing residential properties would remain prohibited, subject to applicable exemptions and exclusions.[2]
Background
As discussed in our previous bulletin, Canadian Government to Prohibit Non-Canadians from Purchasing Residential Real Estate for a Period of Two Years,[3] the Act came into force on January 1, 2023.[4] It prohibits non-Canadians from acquiring, either directly or indirectly, certain residential property in Canada. “Residential property” includes detached houses and similar buildings with no more than three dwelling units, as well as semi-detached houses, rowhouse units, and residential condominium units.[5] The Act exempts qualifying temporary residents, protected persons, and non-Canadians purchasing with a spouse or common-law partner who is a Canadian citizen, permanent resident, person registered under the Indian Act, qualifying temporary resident, or protected person. Additional exemptions and exclusions apply under the regulations.[6]
The prohibition was originally set to expire on January 1, 2025. On February 4, 2024, the federal government announced a two-year extension to January 1, 2027.[7]
Proposed Changes
Budget 2026 proposes two changes to the Act:
- Extension. The prohibition would remain in force until January 1, 2029.[8]
- Exemption for new residential properties. Purchases of new residential properties would no longer be prohibited. The prohibition would continue to apply to existing residential properties, subject to applicable exemptions and exclusions.[9]
The Government has not indicated what would be considered “new residential property” and whether this would capture only pre-sale homes, or any home which has not yet been occupied.
The Government says this approach would protect housing affordability by keeping most of the market available to Canadians, while unlocking more investment in new housing supply. It has committed to proposing legislation and launching a regulatory process on the change “in short order”.[10]
What Does This Mean?
These changes are only proposals and are not yet in force. Budget 2026 does not define “new residential property” or specify when the proposed exemption would take effect. These details will need to be clarified through the legislative and regulatory process. Until then, the current prohibition and exemptions continue to apply.
Developers of new residential projects, non-Canadian purchasers, and anyone advising on residential transactions should follow these developments closely. We will continue to monitor them and will provide updates as more information becomes available.
This bulletin is provided for general information purposes only and does not constitute legal advice. The changes described are Budget 2026 proposals that are not yet in force and may change once implementing legislation and regulations are released.
