Non-Resident Buyers Guide
Purchasing property in Ontario as a non-resident involves additional considerations. Here's what you need to know before buying.
Foreign Buyer Ban (2023-2027)
Canada's Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts non-residents from purchasing residential property until January 1, 2027. However, there are important exemptions.
Exemptions Include:
- Permanent residents of Canada
- Temporary residents (work permit holders, students under certain conditions)
- Refugees and protected persons
- Spouses of Canadian citizens or permanent residents
- Diplomatic and consular staff
Key Considerations for Non-Residents
Non-residents purchasing residential property in Ontario must pay a 25% Non-Resident Speculation Tax on top of the purchase price. This applies to the greater Golden Horseshoe region, which includes Mississauga.
Example:
On a $1,000,000 home, NRST would be $250,000
Note: Rebates may be available if you become a permanent resident or citizen within 4 years of purchase.
Non-residents typically face stricter lending requirements:
- •Larger down payment required (typically 35-50%)
- •Higher interest rates compared to residents
- •Limited lender options (not all banks offer non-resident mortgages)
- •Proof of income from Canadian or international sources required
- •May require Canadian credit history or co-signer
Rental Income
If renting your property, 25% withholding tax applies to gross rental income. You can elect to file a Canadian tax return to pay tax on net income instead.
Capital Gains on Sale
Non-residents pay tax on capital gains when selling. Your lawyer must withhold 25% of sale price pending CRA clearance certificate.
Property Taxes
Same rates as residents - typically 0.6-1% of assessed value annually.
If you won't be living in your property, consider:
- Hiring a property management company (typically 8-12% of rent)
- Setting up Canadian bank accounts for rent collection
- Understanding Ontario's Landlord and Tenant Board rules
- Having a local contact for emergencies
Steps to Purchase as a Non-Resident
Consult a Tax Professional
Understand your tax obligations in Canada and your home country
Confirm Eligibility
Verify you qualify for an exemption or are prepared to wait until 2027
Arrange Financing
Secure pre-approval from a lender experienced with non-resident mortgages
Hire Canadian Professionals
Real estate agent, lawyer, and accountant familiar with non-resident purchases
Budget for All Costs
NRST, land transfer tax, legal fees, and ongoing taxes
Plan for Property Management
If not living in Canada, arrange for property oversight