Buying housing in Canada for foreigners

Many people who move to Canada think about buying their own home. However, it can be difficult to figure out whether this is more cost-effective than renting, if foreign citizens are eligible for a mortgage, and what options are available in the Canadian real estate market.

Can foreigners buy property in Canada?

Until 2023, anyone could purchase property in Canada. However, as of January 1, 2023, a law came into effect that significantly restricted the purchase of residential real estate by foreign individuals within Census Metropolitan Areas (CMA) and Census Agglomerations (CA).

This law was passed in response to the housing crisis and significant pressure on the real estate market, with the aim of ensuring housing affordability for Canadians.

The "Prohibition on the Purchase of Residential Property by Non-Canadians Act" may sound intimidating, but we want to assure you that it contains many exceptions, and it's still possible to buy property in Canada without being a citizen.

The law does not apply to the following categories of foreign citizens:

• Permanent residents of Canada
• U.S. citizens (exempt due to USMCA conditions)
• Consular and diplomatic staff permanently residing in Canada
• Spouses or common-law partners of Canadian permanent residents
• International students who have studied in Canada for at least 2 years in the last 5 years (limited to properties worth up to $500,000 CAD, credit financing allowed)
• Foreign workers with work permits who have worked for at least 183 days in the last 4 years in Canada and filed tax returns during this time (limited to properties worth up to $500,000 CAD)
• Temporary residents with refugee status
• Property buyers in areas outside CMA or CA boundaries
• Buyers of undeveloped land zoned for residential use, provided it's outside CMA or CA boundaries

Thus, foreign citizens can still buy property in Canada, but they must meet certain requirements under this law. Additionally, some types of housing are exempt from the ban: the law doesn't apply to residential properties outside Census Metropolitan Areas (CMA) and Census Agglomerations (CA), as well as vacant land zoned for residential use in these areas. It's important to understand that the decision depends on Statistics Canada's classification of the area, not just the size of the settlement.

It's worth noting that the law restricting foreign purchase of residential property was introduced as temporary. It was initially set to expire two years after coming into effect, but in February 2024, its duration was officially extended until January 1, 2027.

Given the new law, it's advisable to carefully examine all details of the desired property and consult with a realtor.

Rent or Buy?

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Immigrants who have recently arrived in Canada often ask themselves: is it better to take out a loan and pay a mortgage for 10-25 years or rent a place and pay monthly rent?

In general, Canadians like to own their homes. For many years, most Canadians preferred to buy houses or apartments, and currently, two-thirds of Canadian residents own their residential property. However, the growth in the number of households renting over the past 10 years has been 21.5%, which exceeds the growth in homeowning households by 8.4%.

Of course, there are both pros and cons to renting or buying a home in Canada.

Pros of buying property in Canada:

• The property you purchase becomes your legal asset. By paying off your mortgage, you acquire real estate capital that can be beneficial for you and your family in the future.
• Owning your home provides stability and security, as long as you pay your mortgage and property taxes on time.
• Buying a house gives you the freedom to decorate and make adaptations according to your needs.
• As an owner, you decide the fate of the property, including selling it, while renters may be forced to leave if the property owner decides to sell.

Cons of buying property in Canada:

• Maintenance and updates of the house are entirely your responsibility.
• If you ever want to move out of the house, it can be more complicated than when renting.
• Uncontrollable factors, such as high interest rates, can affect property values or make mortgage payments more difficult.
• Owners usually have to pay property taxes, which can increase along with property values.
• While property values can increase, they can also decrease.

Another important factor in choosing between buying or renting is the price.

The average home price in Canada is $691,643 CAD (as of June 2025). For Canadian residents, the minimum down payment at this price can be as low as 5% ($34,582 CAD), but foreign citizens are often required to pay 35% ($242,075 CAD) or more. With a 25-year amortization and a fixed rate of 4% for the first 5 years, the monthly mortgage payment for a resident would be about $3,496 CAD (due to the larger loan amount), while for a foreigner with a 35% down payment, it would be about $2,427 CAD. These amounts include only principal and interest, without property taxes and insurance, which can add another $400-800 CAD per month.

The average rental cost for housing (including apartments and houses) across Canada is $2,315 CAD. A separate house will cost significantly more, especially in large cities. On average, renting is cheaper than mortgage payments, but in some regions or with low interest rates, a mortgage can be more cost-effective. It's worth remembering that rented housing will not become your property. While it takes 25 years to pay off a mortgage, long-term renting can stretch for many decades. It's important to consider that homeownership involves additional expenses for maintenance, repairs, taxes, and insurance, which in rentals are the landlord's responsibility.

If you're not ready to take such a serious step as buying a home and prefer to rent an apartment or house, we recommend reading about what you need to know for long-term renting in Canada.

Housing Prices in Canada

Regardless of whether you decide to rent or buy, keep in mind that Canada is a large country, and real estate prices can vary significantly from city to city and from province to province.

The most affordable major city in Canada in terms of housing costs is Winnipeg, Manitoba. Here, the average home price is $375,390 CAD. Next are two major cities in Alberta — Edmonton and Calgary — where housing prices are also attractive at $420,959 CAD and $596,193 CAD respectively. Montreal, the capital of Quebec, falls into a similar price range with an average home price of $595,132 CAD.

The most expensive real estate market is in Vancouver (British Columbia), where the average home costs $1,318,687 CAD. Toronto (Ontario) follows with an average price of $1,121,615 CAD. However, other major Ontario cities can be half as expensive, with Ottawa at $682,078 CAD and London at $646,155 CAD.

Smaller Canadian cities often have significantly lower prices.

Average home prices by province:

• British Columbia — $1,020,000 CAD
• Ontario — $889,033 CAD
• Alberta — $497,473 CAD
• Quebec — $490,230 CAD
• Nova Scotia — $443,771 CAD
• Prince Edward Island — $376,429 CAD
• Manitoba — $362,535 CAD
• New Brunswick — $320,344 CAD
• Saskatchewan — $305,490 CAD
• Newfoundland and Labrador — $299,032 CAD

Types of Residential Real Estate in Canada

There are several types of housing in Canada, varying in form, size, and cost.

• Condominiums (or "condos") are common in multi-unit buildings, ranging from small complexes to high-rise towers. Condo owners only own their unit and pay monthly fees to a corporation responsible for building maintenance and repairs.
• Townhouses are part of a row of attached homes, each with its own entrance but sharing walls with neighbors.
• Single-family homes stand alone and usually have their own land. Owners are responsible for all maintenance and repairs. This type of housing is typically the most expensive but offers more space and freedom.
• Duplexes and triplexes have separate land plots and entrances but may share walls with neighbors. They look like regular houses but are divided into multiple separate apartments that can be rented individually.

House or Apartment?

Another common question is whether to choose a house or an apartment (or condominium).

Apartments are usually located near city centers, close to offices and entertainment venues. They generally require less time and money for maintenance, with expenses often being a fixed monthly fee.

Single-family homes are typically located farther from city centers, meaning longer commutes. They require more time and money for maintenance: if the roof leaks or other urgent repairs are needed, you'll have to handle these issues yourself without a management company's help. Single-family homes are also more expensive.

However, since it's difficult to find apartments with more than three bedrooms in Canada, buying or renting a house is more suitable for families with several children. Single-family homes offer more open space (possibly a one or two-car garage and a yard) and more privacy, while apartment dwellers only have common areas.

Apartments are often purchased by young people without families as a first step towards homeownership. Older couples also frequently buy apartments to save on maintenance costs.

Mortgage Loans in Canada

Anyone with sufficient funds and a good credit history can apply for a mortgage in Canada.

The minimum down payment is usually 5% to 20% depending on the property value. However, if you're not a permanent resident of Canada, it will be significantly higher — typically at least 35%, and in practice, banks often require 40-50%. It's important to note that not all banks work with non-residents, and interest rates for foreigners are usually 0.5-1% higher than for residents. If your down payment is less than 20%, you'll need to pay for mortgage insurance. The mortgage insurance rate ranges from 0.6% to 4.5% of your mortgage amount.

Loan terms vary from six months to 5 years, with the possibility of extending the contract up to 10-25 years.

Rates can be variable or fixed. As of mid-2025, average fixed rates are 3.8-4.5% per year, while variable rates are around 3.9-4.2%. The Bank of Canada has maintained its key rate at 2.75% since June 2025. You can compare loan rates using the Ratehub.ca website.

To apply for a mortgage, you need to provide several documents:

• Initially, you'll need to confirm your identity and source of income.
• Then, provide financial information including credit score, net worth, and bank account statements.
• Sources of the down payment, which can be savings, proceeds from a previous home sale, a savings account, or a gift.
• Finally, detailed information about the property being purchased is important.

If you want to get a mortgage as a non-resident of Canada, you may need to provide more documents. Pay attention to the following points that apply to non-residents of Canada:

• To get a mortgage in Canada, you need to open an account with a Canadian bank.
• Your down payment can't be a gift, and you must provide proof of funds for 90 days before financing.
• You need to prove a down payment of 35% of the property value (20% for US residents).
• For income proof, you'll need a recent pay stub and a letter from your current employer confirming your employment length, annual salary including bonuses, and that you're not on probation.
• For credit history proof, if Canadian credit bureaus aren't available, you'll need an international credit report or a reference letter from your current bank.
• Some lenders may require you to keep funds equal to a year's mortgage payments in a Canadian bank account before approving your application.

There may also be tax differences between non-residents and residents. For example, in Ontario, some cities charge a non-resident tax on home purchases. This is usually a percentage of the total property value. It's important to note that this tax doesn't apply to Canadian citizens, even if they're not residents.

Housing Costs

If you're renting, you either pay utilities separately or they're included in your monthly rent. As a homeowner, you're responsible for utility bills, annual property tax, and insurance.

Annual property tax in Canada is calculated individually and averages 0.5–2.5% of the assessed value, depending on the municipality.

Vancouver has an Empty Homes Tax of 3% of the assessed taxable value for properties vacant for more than six months a year. Toronto has a similar tax of 1% to 3% of the property value, depending on how long it remains unoccupied. These taxes apply regardless of the owner's citizenship. All owners must file declarations, even if they don't owe these taxes.

Average utility bills in Canada are $389 CAD per month, mostly for electricity. Homes are usually heated electrically, with electric stoves, though some regions (like Alberta or Quebec) may use gas.

Average monthly utility bills in Canadian provinces, including electricity, water, gas, internet, and TV:

• Quebec — $323.96 CAD
• Ontario — $339.49 CAD
• Alberta — $266.41 CAD
• British Columbia — $572 CAD
• Manitoba — $382.4 CAD
• Saskatchewan — $467.75 CAD
• Prince Edward Island — $382.95 CAD
• New Brunswick — $344 CAD
• Nova Scotia — $420 CAD

Insurance is another expense, costing homeowners about $960 CAD per year.

How to Buy a Home in Canada

To buy a home in Canada, follow these steps:

1. Transfer money to a Canadian bank. Funds verification can take up to two weeks, so it's best to transfer money in advance.

2. Choose a home. You can hire a realtor to help navigate the local market. The realtor's fee (2.5% of the purchase price) is paid by the seller. You can also search for properties yourself using websites like:

• www.realtor.ca
• www.kijiji.ca
• www.point2homes.com
• www.zoocasa.com

3. Prepare an Offer to Purchase. Your realtor will help prepare this for the seller. You'll need to put down 5-10% of the purchase price as a deposit. It usually takes 30-60 days to close the deal, or up to 90 days if applying for a mortgage.

4. Apply for a mortgage (if needed).

5. Order a legal property check (Due Diligence). Send a copy of the signed agreement to a lawyer (or notary in Quebec) who will investigate the title, check if property taxes are paid, and look for any liens.

6. Order a technical inspection (optional). You can hire an inspector to check for structural defects, plumbing, and electrical issues. This usually costs $300-$500 CAD.

7. Close the deal. The lawyer prepares a Statement of Adjustment showing all calculations and additional costs related to the purchase.

8. Register ownership. The lawyer registers the title in the provincial land registry, and you receive the title and keys.

Additional Home Buying Costs

Buyers are responsible for:

• Provincial Land Transfer Tax (LTT) — 0.5-2% (not charged in Alberta and Saskatchewan)
• 5% GST and 0-10% PST on new properties (usually included in the purchase price)
• Non-Resident Speculation Tax (NRST) — foreign buyers pay an additional 25% tax in Ontario and 20% in certain areas of British Columbia. Toronto will have an additional 10% municipal tax (MNRST) from 2025. This tax may be refunded if permanent residency is obtained within 4 years
• Lawyer's fee — 0.5-1% (minimum $500 CAD plus GST)
• Title insurance — a few hundred dollars depending on location, type, and value of property
• Estoppel Certificate Fee — $10 CAD (for condo purchases, except in Quebec)

To avoid issues when buying a home, we recommend consulting specialists who can advise you on your specific case. Remember that realtor services for buyers are usually free — the seller pays the real estate agent's commission.