The federal government is proposing to extend Canada's ban on foreign homebuyers for another two years, while introducing an exemption for newly built residential properties.
The proposal, outlined in the 2026 federal budget released Thursday, would keep restrictions on foreign purchases of existing homes in place until January 1, 2029, while allowing foreign buyers to purchase newly built homes.
Ottawa says the changes are intended to protect access to existing housing for Canadians while attracting foreign investment to support new housing construction.
The ban was first introduced in January 2023 as part of Ottawa's efforts to address housing affordability and limit foreign demand in Canada's residential real estate market.
Originally intended to last two years, the prohibition was extended in 2024 and is currently set to expire on January 1, 2027.
Under the existing rules, non-Canadians are generally prohibited from purchasing certain residential properties, including houses and condominiums, in designated urban areas. Canadian citizens and permanent residents are exempt, along with certain temporary residents and other eligible buyers.
The proposed changes would maintain restrictions on existing and resale homes while reopening the market for foreign investment in new housing.
Ottawa says the extension is intended to improve access to existing homes for Canadians looking to enter the housing market.
However, the impact of the ban on housing affordability remains uncertain, with economists pointing to higher interest rates and broader market conditions as major factors behind changes in home prices.
The proposed extension would require legislation before the current ban expires.
