Industry backs Canada's foreign buyer's ban changes, but which new homes qualify? | Daily Hive

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Prime Minister Mark Carney’s partial pivot to let foreign buyers purchase new homes is drawing support from development and real estate organizations across the country.

Last week, the Government of Canada released its 2026 budget, which included extending the existing foreign buyers’ ban on residential property through January 2029. However, there would be new exemptions for foreign buyers seeking to acquire new homes, with the ban on existing homes maintained.

The federal government has noted that this amendment to the ban would attract investment into the construction of new housing while keeping most of the existing market available to Canadians.

The ban first began in January 2023 — amid the post-pandemic emergence of a hot real estate market and escalating home prices across the country, at a time when Canada was experiencing significant population growth due to the federal government’s elevated immigration targets — and was initially intended to last for two years. In 2024, it was extended to January 2027, with the 2026 federal budget indicating that legislation will soon be implemented to extend and amend the ban through January 2029.

This also coincides with changes to the federal government’s 2027 immigration targets, specifically expanded opportunities for temporary residents already in Canada to become permanent residents.

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Under the existing regulations, permanent residents are not subject to the foreign buyer’s ban, while exemptions already exist for certain temporary workers and international students, protected persons, and certain buyers purchasing jointly with an eligible spouse or common-law partner.

Before the federal government’s foreign buyers’ ban took effect, foreign buyers represented a relatively small share of Metro Vancouver’s home purchases — due to the existing impacts of the Government of British Columbia’s provincial foreign buyer’s tax, which was first created in 2016 with a 15 per cent tax rate before it was increased to 20 per cent in 2018.

Foreign buyers were involved in approximately 1.4 per cent of B.C.’s residential property transactions in 2022, the year before the federal ban took effect. In Metro Vancouver, the share was approximately 1.3 per cent, representing 778 of the region’s nearly 60,000 registered residential transactions that year.

Government of Ontario data similarly suggested limited foreign buyer activity in the Toronto area before the federal ban. In 2022, transactions involving foreign buyers represented approximately 1.25 per cent of recorded property transfers across the Toronto, York, Peel, Halton, and Durham land registry areas combined. Toronto itself recorded a higher share of two per cent.

For developers and prospective foreign homebuyers, the precise scope of the new federal exemption for foreign buyers is unknown at this time.

Real estate lawyers at law firm Fasken emphasize that the federal government still needs to provide some precise details to better understand the implications.

In a reaction bulletin co-authored by Fasken partner and real estate lawyer Kristian Arciaga, the law firm cautions that the federal government has not defined what technically counts as a new residential property.

It remains unclear whether the exemption would apply only to pre-sale homes or also to newly completed homes that have never been occupied. Carney’s administration needs to clarify these details through legislation and regulations, and has not specified an effective date.

That distinction is particularly relevant in Metro Vancouver, where Vancouver-based real estate brokerage and marketing firm Rennie counted more than 14,000 unsold new condominiums at the end of June 2026. Of those units, 15 per cent were in projects awaiting construction, 56 per cent were under construction, and the remaining 29 per cent were newly completed but unoccupied.

An exemption limited to only pre-sales would therefore leave thousands of finished, unsold, brand-new homes outside the new federal exemption, as developers contend with record-low new condominium sales.

Despite those unanswered questions, development, real estate, and other industry organizations across Canada have generally welcomed the proposed exemption, viewing it as a way to attract investment, help projects secure financing, and support the construction of more homes to better ensure future supply needs are met, given the lengthy, years-long process to achieve projects.

Michael Drummond, the CEO of the Urban Development Institute, welcomed the change, arguing that applying the ban to new homes had cut off investment that developers needed in order to sell enough units in advance to secure construction loans.

“The original ban applied to new homes as well as existing ones. That cut off investment that many projects rely on to reach their pre-sale targets and secure construction financing. Costs are already making it hard to get projects off the ground, so losing that investment had a real impact,” said Drummond in a statement.

“Keeping the ban on existing homes while allowing investment in new construction is a sensible balance. It protects buyers in the existing market, helps clear unsold inventory, and supports the new homes British Columbians need.”

But Drummond asserts the Government of British Columbia needs to apply a similar strategy for the provincial foreign buyer’s tax, which has been in place since 2016.

The BC Real Estate Association (BCREA) raised a similar concern about the interaction between federal and provincial policies. In its reaction to the federal budget, BCREA noted that it and the Canadian Real Estate Association (CREA) had advocated for the new-home exemption, drawing on an Australian approach that directs foreign investment toward improving the financial viability of additional new housing projects.

However, BCREA senior policy analyst Matt Mayers noted that B.C.’s separate foreign buyer property transfer tax remains in place.

“So, unless B.C. adjusts its rules, the federal exemption may have limited practical effect in the province,” wrote Myers.

Between June 10 and Aug. 1, 2016, foreign buyers were involved in 13.2 per cent of Metro Vancouver residential transactions, just before the provincial foreign buyers tax took effect on Aug. 2, 2026. At the time when it provided this data publicly, B.C.’s provincial government cautioned that some purchases might have been expedited over the weeks and days leading up to the start of the tax, in order to avoid the extra cost.

CREA’s federal budget reaction similarly highlighted the separation between purchases that contribute to new housing and those involving existing properties.

Andrew Lis, the chief economist and vice-president of data analytics for Greater Vancouver Realtors, the real estate board for much of Metro Vancouver, including the city of Vancouver, also supported the changes.

“We also welcome the tweaks to the foreign-buyer prohibition, which will allow investment in new development and should help support the construction of new homes,” said Lis.

The federal changes follow calls made in 2025 from 26 B.C. developers and industry leaders for Carney’s administration to allow foreign purchases of new homes and pre-sales while maintaining restrictions on existing homes. They argued this would help projects secure construction financing and also sought relief from B.C.’s foreign buyers tax.

The Toronto Regional Real Estate Board expressed similar support. In reaction to the federal budget, Canada’s largest real estate board said the change amounts to “rebalancing” the ban’s framework, responding to its call to protect Canadian residents’ access to existing homes while encouraging investment in additional supply, including condominiums and smaller multi-unit developments.

Support for attracting investment into housing comes alongside wider industry calls for governments to address the costs and barriers facing new development.

In its response to the overall budget, the Greater Toronto Area’s Building Industry and Land Development Association (BILD) welcomed the federal government’s increased attention to ownership housing. BILD president and CEO Dave Wilkes warned against treating weaker market conditions as evidence that housing problems have been resolved.

“With housing markets cooler across the country, it is tempting to think that the housing crisis is behind us. However, addressing the underlying structural challenges that exist in attracting capital to invest in infrastructure and housing is a vital step to bringing long-term stability to the housing market,” stated Wilkes.

“Now is the time to work on collaborative solutions to create the conditions for long-term affordability and stability in Canada’s housing market.”

But the Canadian Home Builders’ Association (CHBA) was more critical of the federal government’s overall housing package, which included not only the foreign buyer’s exemption but also other components, such as new mortgage flexibilities for borrowers seeking a 30-year mortgage and builders looking to advance smaller multi-unit residential developments. They asserted that it relied heavily on previously announced commitments and offered too few new measures to support homes intended for ownership.

“Addressing Canada’s housing challenges requires a range of housing options, and investments in social and rental housing are certainly needed,” said CHBA interim CEO Frank Lohmann.

“But we cannot lose sight of the importance of homeownership in Canada’s housing system. We need more policies that support the construction of homes Canadians can aspire to own, alongside the measures being taken to increase rental and non-market housing supply.”

The association urged the federal government to help municipal governments find alternatives to charging new development fees upfront for infrastructure, such as borrowing and recovering costs through ongoing user charges.

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