Real estate rules don't discriminate against foreigners

A $1-million real estate deal in Toronto has set tongues wagging about the encroachment of foreigners into the Canadian housing market but it's merely a product of home ownership laws that don't discriminate between foreign and local buyers.
Condominiums along the shores of Coal Harbour in Vancouver. Vancouverites have long complained that wealthy real estate speculators from Hong Kong and mainland China have driven up housing prices in the city, but exactly how much of Vancouver is foreign-owned is hard to assess since the industry doesn't keep such data and many foreign investors use local proxies to make purchases. (Andy Clark /Reuters)

Last week's $1-million sale of a modest bungalow in north Toronto to a university student from China got tongues wagging and tempers flaring about the supposed encroachment of foreign buyers into the Canadian real estate market.

Stories of wealthy foreigners snapping up properties and pricing Canadians out of their local real estate markets abound. Whether it be vacationing Britons buying quaint cottages on the coast of Newfoundland or Hong Kong tycoons cornering the condominium market in downtown Vancouver, foreign real estate investors seem to be the new bogeyman of homebuyers across the country.

Just how pervasive foreign ownership of Canadian real estate is, however, is hard to establish since neither the government nor the real estate industry collects official data on the subject and buyers often use local proxies. Informal polls of realtors in Metro Vancouver and the Greater Toronto Area by industry associations and the media have reported figures as varied as 3.5 per cent and 20 per cent for the percentage of housing sales that involve buyers from outside Canada.

Canada has few restrictions on foreign ownership of real estate, and what limits do exist are at the provincial level and mostly pertain to agricultural land.

Larger down payments

Foreigners who plan on spending less than six months a year in Canada can keep a home here without having to apply for residency. Those who buy a property and plan on living in it longer than that have to immigrate to the country and apply for permanent residency.

If they rent out their property, they don't have to live here at all but do pay a 25 per cent withholding tax on rental income that, unlike for Canadian property owners, is usually taken off the monthly rent.

Prince Edward Island limits the amount of oceanfront acreage people who aren't residents of the province can buy. (Shaun Best/Reuters)

Homebuyers from abroad are subject to all the same fees and taxes as Canadians when purchasing real estate — although they can face higher property or land transfer taxes in some jurisdictions and are subject to different capital gains tax rules when they sell a property.

If they take out a mortgage on their property, they have to do so at a Canadian bank and will usually be asked to put up a larger percentage of the purchase price as a down payment than permanent residents — typically, 35 per cent versus the five or 10 per cent that is more common for Canadian residents.

Most provinces treat foreign homebuyers the same as local residents. One exception is P.E.I., which imposes higher property taxes on anyone who is not a resident of the island — not just foreigners — and forbids them from owning more than five acres of land or 50 metres of waterfront without special permission from the Island Regulatory and Appeals Commission.

Global land grab

Internationally, some of the most heated debate around foreign ownership of real estate in recent years has had to do not with urban or oceanfront properties but with farmland. The global land grab, as it's sometimes called, has seen governments and multinational agribusinesses from China, Saudi Arabia, India and elsewhere quietly buying up arable land across the African continent and in countries as far flung as Indonesia, Australia and Argentina.

In Canada, several provinces have protections in place limiting the amount of agricultural land foreigners can buy. 

  • Alberta limits non-residents to two plots of agricultural or recreational land not exceeding a total of 20 acres.
  • Saskatchewan restricts sale of agricultural land to foreigners to 10 acres.
  • Manitoba prevents non-residents from owning more than 40 acres of farmland and requires that they move to the province within two years of purchasing the land.
  • Quebec doesn't allow non-residents to purchase farmland at all without permission from the Commission de protection du territoire agricole du Québec. A non-resident is anyone who has lived in the province for less than 366 days within the 24 months preceding a real estate transaction.

Canada's open-door policy is comparable to the approach to foreign property ownership in other countries, including the U.S., Germany, France and the U.K.

There are some jurisdictions, however, that have taken steps to restrict foreign investment in real estate beyond simply imposing higher taxes on homebuyers from abroad.


A man works on a house in Sydney. Australia put the brakes on foreign ownership of real estate in 2010 after speculation drove up housing prices in Sydney and other major cities. (Daniel Munoz/Reuters)

The country recently tightened its laws after a brief period of opening up real estate to foreigners during the economic crash. It reintroduced restrictions on ownership in 2010 after a surge in property prices made housing increasingly unaffordable, especially in major cities like Sydney and Melbourne. (In 2010, a survey of housing markets in Australia, the U.S., Canada, the U.K., New Zealand and Ireland ranked Australia's housing market as the least affordable.)

Today, the following restrictions apply to foreigners:

  • Foreigners — regardless of whether they are temporary residents of Australia or live abroad — are prohibited from buying existing housing stock (homes that have been previously owned or occupied for more than 12 months) for investment purposes — i.e. as a rental or vacation property.
  • The exception to the above rule is if a foreigner buys existing housing stock that they plan to demolish and redevelop. The property must be redeveloped within two years, and the redevelopment must increase the number of housing units. The property cannot be rented out prior to the redevelopment. The new property can be rented out, sold or used by the owner.
  • Foreigners temporarily residing in Australia can apply to buy one piece of existing property to use as a residence provided they sell it when they leave Australia. This provision was meant to address complaints that Asian investors buying property for children studying in Australia were outbidding locals and holding onto property after their children left the country. These are some of the same complaints being raised currently in Canada.
  • If foreigners buy vacant land for residential development, they have to build on it within two years and are allowed to rent out, use or sell the built properties.
  • There is no limit to the amount of newly constructed real estate foreigners can own as long as the property has not been marketed exclusively to foreigners overseas. Such property can be used as an investment.


Swiss real estate is some of the most coveted in the world, but the country also has some of the strictest rules when it comes to foreign ownership. 

  • The government assigns annual quotas to the country's cantons limiting the number of houses or flats that can be sold to foreigners who do not reside in Switzerland. Each sale must still be authorized by the canton in which the property is located, and the cantons can set their own additional restrictions. Many limit foreign property sales to tourist regions, for example, or allow foreigners to purchase only property that is already foreign-owned.
  • Foreigners can buy only one property to be used as a holiday home or a secondary residence. They cannot purchase a property for the sole purpose of renting it out, although holiday homes can be rented out periodically on a short-term basis. 
The Swiss alpine resort town of Andermatt is one of the few places in Switzerland where foreign ownership of real estate is unrestricted. Luxury studio apartments marketed as vacation properties can sell for several million dollars. (Arnd Wiegmann /Reuters)
  • Property owners need special authorization if the surface area of their real estate exceeds 1,000 square metres.
  • In some cantons, foreigners are barred from selling their property for a certain number of years after purchasing it — generally between five and 10 years.
  • If foreigners buy vacant land, they must build on it within a year.
  • Foreigners who live in Switzerland do not need to get prior authorization to purchase real estate that will serve as their main residence and can rent out the property or use it as a holiday home if they move to another part of the country.
  • One area that is exempt from restrictions on foreign ownership of property is the alpine ski resort town Andermatt, where luxury condominiums marketed to wealthy foreigners as vacation properties can sell for several million dollars.
  • Foreign nationals from EU members states and some other European countries who want to buy property do not require the same type of prior authorization as other foreigners.


China imposed new restrictions on property sales in 2010 — for locals as well as foreigners — in order to curb rising prices and real estate speculation.  It raised down payments, tightened mortgage rules, introduced property taxes in several jurisdictions where they did not exist and put in place new limits on ownership.

  •  Foreigners can own only one residential property for their own use (permanent residents are restricted to two properties).
  • Foreigners must reside in the country for one year before they can buy property.
  • Foreign companies who buy commercial real estate must use it themselves.

Recently, some cities have started easing or not enforcing the restrictions on their own in an attempt to boost the local revenue they get from property sales.


Foreigners cannot, for all intents and purposes, buy land in Thailand and are generally restricted to purchasing condominiums, although they cannot own more than the equivalent of 49 per cent of the total floor area of all the units in a single condominium building.


Kazi Stastna

Senior Producer

Kazi Stastna is a senior producer with She has worked as a features writer and copy editor with CBC's digital news team for over a decade. Prior to that, she was at the Montreal Gazette and worked as a reporter and editor in Germany and the Czech Republic.