The Foreign Buyer Ban Now Runs to 2029: What It Means for Toronto Condo Sellers.

A few weeks ago, we were helping the owner of a three-bedroom condo in the downtown core decide whether this was the right time to sell. He was confident the federal foreign buyer ban would end in the new year, and he wanted to wait for international buyers to come back into the market before listing.

It was a fair bet. The ban was set to expire on January 1, 2027, and developers had spent the last two years asking Ottawa to let it lapse.

Then, on November 5, Budget 2026 answered the question. The ban on foreign purchases of existing homes is set to run for two more years, to January 1, 2029. Waiting would have meant waiting until 2029, so he decided to list now.

Here’s what the budget actually says, what’s still unclear, and what it means if you own a resale condo in Toronto.

What the Budget Actually Says

The budget proposes two changes to the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which has been in place since January 1, 2023:

1. The ban on foreign purchases of existing homes would be extended two years, to January 1, 2029.
2. New residential properties would be exempt.

The ban itself works the same way it has for almost four years. It covers houses, townhouses, condo units and buildings with three units or fewer in and around Canada’s cities, with exceptions for permanent residents, some work permit holders and a few others. CMHC’s summary of the Act has the full list.

This is the second time the ban has been extended. The first extension came in February 2024, when the end date moved from 2025 to 2027.

We covered the rest of the budget’s housing measures in What Budget 2026 Means for Toronto Real Estate. This post sticks to the ban, and to one tax change for sellers who live outside Canada.

What Counts as “New”? (Short Answer: We Don’t Know Yet)

The budget doesn’t define a new residential property. It doesn’t say whether a presale contract counts, or an assignment, or a finished unit that’s never been lived in. It also doesn’t give a start date for the exemption.

That matters in Toronto, where developers are sitting on a lot of unsold units. As The Hub reported, whether the exemption reaches presales will depend on how Ottawa writes the definition.

The government says legislation will follow “in short order.” As of November 9, no bill has been tabled, and the Act hasn’t been amended since 2023. Until Parliament passes something, January 1, 2027 is still the end date in law (things can change, and quickly).

In other words, if you’re thinking about buying a new condo from outside Canada, wait for the actual rules before you sign anything.

Why Waiting Stopped Making Sense for Our Client

Our client’s plan rested on one assumption: that foreign buyers would be back in the resale market in early 2027. Once the budget pushed that out to 2029, waiting meant two more years of carrying costs with no new buyers on the way.

There’s a second piece that’s easy to miss. If new condos open up to foreign buyers and resale condos don’t, any international demand that does come back will go to new buildings. A resale three-bedroom downtown would be competing with brand-new units for those buyers, and it couldn’t sell to them anyway.

The market numbers made the decision easier. According to Repliers data for the City of Toronto, the median condo price in October was $560,000, down 6.7% from last October, and condo sales fell 16% year-over-year. You can follow the monthly numbers on our Toronto condo prices page.

In a slower market, careful pricing and good presentation matter more, and that’s how we approach selling a condo in Toronto. If you’re weighing the same decision, it helps to estimate the cost of selling first so you know your real number.

Even With the Exemption, Foreign Buyers Pay 35% in Toronto

The federal ban and the foreign buyer taxes are separate. The budget only touches the ban, so even a foreign buyer who qualifies for the new-home exemption still pays two extra taxes on a Toronto purchase:

• Ontario’s Non-Resident Speculation Tax, 25% of the price, in place at that rate since October 2022
• Toronto’s Municipal Non-Resident Speculation Tax, 10% of the price, since January 1, 2025

Here’s what that looks like on an $800,000 new condo. The provincial tax is $200,000 and the city tax is $80,000, so $280,000 before the regular provincial and Toronto land transfer taxes. You can estimate your closing costs to see the rest.

That’s why we don’t expect a rush of foreign buyers, even once the rules are written. For most, a Toronto condo would have to make a lot of sense to justify a 35% tax on day one.

Selling From Outside Canada? What Changes January 1, 2027

The budget also changes the tax rules for some sellers who live outside Canada, though not as many as the headlines suggest.

Today, when a non-resident sells Canadian real estate, the buyer has to hold back 25% of the price and send it to the CRA, unless the seller gets a clearance certificate first. For sales on or after January 1, 2027, the budget proposes dropping that to 15% when the seller is a corporation. According to Fasken, the lower rates apply to corporate vendors only.

Why only corporations? Corporations often pay much less tax on a gain than the 25% being held back, so the government is narrowing that gap. A non-resident who owns a condo personally would still see 25% withheld.

The budget also proposes an exemption from withholding for certain tax-deferred section 85 transfers. That’s a corporate restructuring tool, and it won’t apply to a typical condo sale.

One thing hasn’t changed: a non-resident seller still needs to notify the CRA and apply for a clearance certificate, usually with Form T2062. The CRA’s guide to non-resident property sales walks through the process.

The Situations We Get Asked About

“I moved abroad but still own my condo here.” You’d likely be selling as a non-resident individual, so the 25% holdback stays. How much tax you actually owe depends on when you left and how you used the home, so speak with a cross-border tax accountant before you list.

“My condo is owned by a corporation.” If the corporation is non-resident, a closing on or after January 1, 2027 could mean a lower holdback, assuming the rule passes. Ask your accountant whether the closing date matters for you before you agree to one.

“There’s a tenant in the unit.” That’s a separate set of rules. We cover it in selling a tenant-occupied condo in Toronto.

Whatever your situation, budget your full costs first. Our post on the costs of selling a home in Toronto is a good place to start.

What’s Next?

The next step is the bill. When it’s tabled, we’ll be looking for two things: how “new” is defined, and when the exemption starts. With January 1, 2027 less than two months away, it should come soon.

Will opening new condos to foreign buyers help clear Toronto’s unsold inventory, and will it pull any demand away from resale? It’s a trend to watch, and we’ll share what we learn in our monthly Toronto market updates.

Thinking about selling your condo and not sure whether to wait? Get in touch with our team and we’ll walk you through the numbers for your building.