What Budget 2026 Means for Toronto Real Estate.

This fall, a lot of the sellers we met with asked us the same thing: should we wait until the new year and see what happens with the foreign buyer ban? On November 5, Ottawa answered it. The ban on foreign buyers of existing homes is staying until January 1, 2029.

That’s the part of Budget 2026 most of our sellers will care about, but it isn’t the only housing change. The budget also raises the price limit on one kind of mortgage insurance, makes new fourplexes easier to finance, and lowers the amount withheld when a non-resident sells. There’s no new tax on homeowners and no change to land transfer tax.

Most of this still has to pass into law, so the details could change before anything takes effect. Here’s what we know so far, and what it means for buyers and sellers in the neighbourhoods we work in every day.

The Short Version

If you only have a minute, these are the five changes that matter most for Toronto buyers, sellers and owners.

Measure	Who it affects	When
Price limit for optional mortgage insurance rises from $1 million to $1.5 million, with 30-year amortizations	First-time buyers and buyers of new homes	Date not yet announced
Bank of Canada to publish insured mortgage rates; CRA to verify income for lenders	Anyone getting a mortgage	Rates: no date yet. CRA pilot funded from 2027-28
Insured construction loans for new three- and four-unit homes; private insurance for 5 to 50 units	Homeowners and small builders	February 1, 2027
Foreign buyer ban on existing homes extended; new homes exempt	Resale sellers, developers, international buyers	Ban runs to January 1, 2029
Lower withholding when a non-resident sells	Owners who live outside Canada	Sales on or after January 1, 2027

Buying a Home: What Changes With Your Mortgage

The biggest change for buyers is to mortgage insurance. The budget proposes raising the price limit for what it calls optional mortgage insurance from $1 million to $1.5 million, and allowing 30-year amortizations on those mortgages, as long as at least one borrower is a first-time buyer or the home is newly built.

The word “optional” matters here. As we read it, this is insurance a lender can choose to buy on a mortgage even when you put 20% or more down, which is different from the insurance you’re required to have with a smaller down payment. Ottawa says the goal is more competition between lenders. Finance hasn’t published the full rules yet, so once it does, it’s worth asking your mortgage broker how this applies to you.

There are a few smaller changes too. According to the budget, the Bank of Canada would start publishing insured mortgage rates so you can compare what lenders are offering, and the CRA would be able to confirm your income directly with your lender, which should speed up approvals and help cut down on fraud. Ottawa also plans to consult on making prepayment penalties (what it costs to break a mortgage early) easier to understand.

If you’re planning to buy in the next year, our guides to preparing for a mortgage and saving for a down payment are a good place to start.

Building a Fourplex Just Got Easier to Finance

Starting February 1, 2027, new three- and four-unit homes would qualify for insured construction loans of up to 90% of the property’s value. There’s no maximum price, and you wouldn’t have to live in one of the units.

Why does that matter? Under today’s rules, a new fourplex usually doesn’t qualify for insured financing, because it’s worth more than the price cap and the owner has to live in one of the units. The budget uses exactly that example. Under the new rules, the owner could rent out all four homes with a mortgage amortized over up to 30 years, or sell them individually. Private mortgage insurers would also be allowed to insure buildings with five to fifty units.

Toronto already allows up to four units on most residential lots, so zoning hasn’t been the main obstacle for a while. Financing has. On streets with deeper lots, like parts of Wychwood and Oakwood-Vaughan, that could make a difference to what a house is worth to the right buyer. If you’re thinking about selling, it’s worth asking whether your lot has multiplex potential, and how that factors into how we price a home.

International Buyers and Non-Resident Sellers

The budget proposes extending the ban on foreign buyers of existing homes by two years, to January 1, 2029. New homes would be exempt.

For resale sellers, that settles the question we kept hearing this fall. International buyers won’t be coming back for existing homes in 2027, so if that’s why you were holding off, it makes sense to plan around the buyers who are in the market now. For developers, the new-home exemption is welcome news, especially with condo sales down 16% from last October.

There’s also a smaller change for owners who live outside Canada. When a non-resident sells, the buyer has to hold back part of the purchase price until the CRA issues a clearance certificate. For sales on or after January 1, 2027, that holdback would drop from 25% to 15% of the purchase price for most properties, and from 50% to 30% for certain others. In other words, more of the money reaches the seller on closing day. Every situation is different, so speak with a cross-border tax accountant before you list. If you own a pied-à-terre in Toronto and live elsewhere, this one is worth a conversation.

Rates, Rents and Where the Market Stands

The budget arrived a week after the Bank of Canada raised its policy rate by 0.25 points to 2.50% on October 28, its first increase since 2023. Higher energy prices have pushed inflation to about 3%, and according to the budget, the Bank has said more increases could follow, though it plans to move carefully. The next decision is on December 9, and we keep every date in our Bank of Canada calendar for 2027.

Some of the other numbers in the budget are more encouraging. It reports that Toronto asking rents are down 14% from their peak, and that the Bank of Canada’s housing affordability measure (the share of income a typical household needs to cover ownership costs) has dropped to 41% from a peak of 55%. That’s still above the 2016 to 2019 average of 37%, but it’s moving in the right direction.

Here’s where the City of Toronto stood heading into the budget.

City of Toronto	Figure	vs last year
Median price, all homes (3 months to October)	$812,884	Down 3.2%
Median price, houses (October)	$1,200,000	Flat
Median price, condos (October)	$560,000	Down 6.7%
Home sales (October)	2,112	Down 9.9%
New listings (October)	5,692	Down 8.5%

The typical house held its value from last October. The typical condo sold for 6.7% less, and condo sales fell 16%. That lines up with the budget’s own note that condos are the weakest part of the market right now.

Source: City of Toronto, TRREB MLS® data. The 3-month median is from our Toronto market page; October figures compare October 2026 with October 2025. Houses include freehold detached, semi-detached and townhouses; condos include apartments and condo townhouses. More in our October 2026 market update.

If You’re Selling

The budget doesn’t bring a new group of buyers into the resale market, and rates went up in October. What it does do is answer a few open questions, which makes it easier to plan. If you’re thinking about selling in the spring, the most important thing is still pricing for the market as it is today. And if your lot could hold a multiplex, make sure buyers know it.

If You’re Buying

If you’re a first-time buyer or buying a new home, a 30-year amortization could lower your monthly payment. Rates are moving up rather than down right now, so we’d get pre-approved early, run your numbers through our monthly cost calculator, and think about whether fixed or variable makes more sense for you.

What Didn’t Change

Land transfer tax is set by the province and the city, so the budget doesn’t touch it. You can run your numbers with our land transfer tax calculator.

There are also no changes to the principal residence exemption, the First Home Savings Account or the RRSP Home Buyers’ Plan, and the GST relief for first-time buyers of new homes (worth up to $50,000) stays in place. Toronto’s Vacant Home Tax is a city program, so the 2026 declaration works the same way it did before. If you haven’t filed yet, you have until April 30, 2027.

What’s Next?

Most of these measures still need legislation or regulations, so the details could change. Over the next few months, we’ll be watching the Bank of Canada’s December 9 decision, the full rules on the higher insurance limit, the foreign buyer legislation Ottawa says is coming “in short order,” the February 1, 2027 start date for multiplex financing, and the Spring Economic Update 2027.

Will cheaper financing finally get more fourplexes built on Toronto’s side streets? It’s a trend to watch, and we’ll share updates as the details come out.

Thinking about buying or selling in the next few months and not sure how the budget affects you? Get in touch with our team and we’ll walk you through it.