What Budget 2026 says about real estate: the foreign buyer ban would run to January 1, 2029 with new homes exempt, mortgage insurance gets more flexible, homebuilding gets a boost, and a few tax rules change for property sellers and trusts.
The short version
- Foreign buyer ban: the budget proposes to extend it by two years, to January 1, 2029, for existing homes. New homes would be exempt.
- Still a proposal: the government says it will bring legislation and a regulatory process “in short order”. The ban is currently set to end on January 1, 2027, so timing matters.
- Mortgages: a higher price limit ($1.5 million) for optional mortgage insurance, 30-year amortizations for some buyers, and new options for 3 to 50 unit buildings.
- Homebuilding: a larger Build Canada Homes, federal land for housing, and faster permits.
- Tax rules for property: lower withholding when a non-resident corporation sells Canadian real estate, and a tighter rule on family trusts paying property out to non-residents.
- BC: the provincial foreign buyer tax and the Speculation and Vacancy Tax are provincial, so this federal budget does not change them.
1. Foreign buyers: what the budget says
The budget has only a few sentences on this, in the housing chapter. Here is what it says, in plain words:
- Extension: the ban on foreign purchases of existing residential property would run for two more years, to January 1, 2029.
- New homes exempt: newly built residential property would be exempt. The idea is to keep most of the existing market available for Canadians while inviting more investment into new housing supply.
- How it happens: the budget’s legislation list says the government will introduce a bill to extend the Prohibition on the Purchase of Residential Property by Non-Canadians Act to January 1, 2029, and the housing chapter adds that it will also “launch a regulatory process”.
- Other levels of government: the budget says it will keep supporting measures by other levels of government that address housing market pressures, including speculation. For BC, that points to the provincial taxes below.
Can a foreign buyer buy, and when?
| Question | Where things stand |
|---|---|
| Today | The current ban applies until January 1, 2027. Published summaries of the Act describe it as covering non-Canadians (people who are not citizens or permanent residents, and corporations controlled by them) buying residential property such as houses, small multi-unit buildings and condo units in the urban areas the Act covers. There are limited exceptions, and breaking the rules is an offence with fines and possible court-ordered sale. Please check the Act and speak with a lawyer for your situation. |
| Existing homes | Under the proposal, the current rules would continue until January 1, 2029 (if the extension passes). |
| New homes | Under the proposal, exempt, so buyers could purchase newly built homes. The budget does not say from what date, so confirm before signing anything. |
| After 2029 | Not addressed. The ban would end on that date unless it is extended again. |
What the budget does not say yet (the subtleties)
- What counts as “new”? A brand-new unit, a pre-sale, a first sale after completion, a recent assignment? The definition will matter a lot, and the budget does not give it.
- Start date of the exemption. It could start on Royal Assent, on a set date, or through regulations.
- A possible gap. If the legislation is not passed before January 1, 2027, the current ban could end before the extension starts. The budget does not explain how that would be handled.
- Corporations, land and mixed-use. Whether the new-home exemption works the same way for companies, vacant land or mixed-use buildings is not stated.
- Existing exceptions. The budget does not mention changing the current exceptions (for example for certain workers), so we expect them to carry over, but we will wait for the bill.
- Contracts already signed. How the change treats deals already in progress is not covered.
BC: the provincial side
- Foreign buyer tax: BC charges an additional 20% property transfer tax on residential property bought by foreign entities and taxable trustees in Metro Vancouver, the Capital, Fraser Valley and Nanaimo regional districts, and the Central Okanagan, with some exemptions (for example for certain BC Provincial Nominees buying a principal residence). It is separate from the federal ban, so a purchase that is allowed federally could still carry the BC tax. See the BC government page.
- Speculation and Vacancy Tax and Vancouver Empty Homes Tax: these are separate local filings and the federal budget does not change them. Our guide has the dates: BC Speculation and Vacancy Tax and the Vancouver Empty Homes Tax.
2. Buying a home: mortgage changes
| Change | What it means |
|---|---|
| Higher price limit | The home price limit for optional mortgage insurance would rise from $1 million to $1.5 million. |
| 30-year amortization | Allowed for these insured mortgages if at least one borrower is a first-time buyer, or the home is newly built. Longer amortizations mean lower payments, but more interest over time. |
| 3 and 4 unit homes | More flexibility for insured financing. For a newly built three- or four-unit building, the budget’s example shows insured construction financing up to 90% of value, no maximum property value, and no need for the builder to live in one of the units. |
| 5 to 50 unit buildings | Private mortgage insurers could offer mortgage loan insurance. These changes start February 1, 2027. |
| Rate transparency | The Bank of Canada would publish better information on insured mortgage rates, so borrowers can compare. |
| Income verification | The CRA could verify income for lenders and insurers (with $13 million over three years to build a pilot), to make applications smoother and reduce fraud. |
| Prepayment penalties | The government intends to consult on clearer information about prepayment penalties for insured mortgages. |
A detail to check: the budget text does not give a start date for the $1.5 million limit and 30-year amortization, and one example in the same chapter already treats $1.5 million as the cap. Ask your lender or mortgage broker what applies today.
Already in place and still available: the GST relief on new homes for first-time buyers, the First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan. Our year-end tax planning checklist covers the FHSA.
3. Building more homes
- Build Canada Homes: another $13 billion over ten years (cash basis, starting 2028-29), for a total of $45 billion and a goal of 200,000 homes over the decade. At least 10% of the expanded amount is for Indigenous housing. The budget lists Heather Lands in Vancouver among its examples.
- Non-market housing target: 24,000 non-market housing starts a year over the next decade.
- Federal land: $1.5 billion over four years from 2027-28 (plus $387.4 million later) for water, wastewater, roads and other services on federal land that can be used for housing.
- Faster permits and modern building methods: $100 million over three years for e-permitting and AI-assisted reviews with municipalities, $300 million over three years from 2028-29 to help build industrial capacity for modern construction methods, and money to modernize housing data and building codes.
- Rental housing: the Canada Housing Benefit would be renewed for ten years. The budget also lists the existing GST rebate and loan program for purpose-built rental housing among the supports that continue.
- Builder financing: after a September consultation, the government says it is exploring options to help builders finance homes meant for ownership. No details yet.
4. Tax rules that touch property
Lower withholding when non-resident corporations sell Canadian real estate
When a non-resident sells Canadian real estate, the buyer has to hold back part of the price for the CRA unless the seller gets a clearance certificate. The budget proposes lower amounts for non-resident corporate sellers, because the current rates can be more than the tax actually owing:
| Type of property | Buyer holds back now | Proposed |
|---|---|---|
| Capital property (the usual case for real estate held as an investment) | 25% of the price | 15% of the price |
| “Specified” property (for example depreciable property, or real estate held as inventory) | 50% of the price | 30% of the price |
For capital property, the seller’s own payment to get a clearance certificate would also drop from 25% to 15% of the gain. These changes would apply to sales on or after January 1, 2027. For individual and trust sellers, we did not see a change in the budget text.
Tax-deferred transfers (section 85 rollovers)
For a fully tax-deferred section 85 rollover of taxable Canadian property by a non-resident, the budget would remove the withholding and remittance step, as long as the election is filed and the buyer notifies the CRA within 30 days. That should speed things up. At the same time, an anti-avoidance rule would be tightened, extending a three-year look-back to five years. Both start January 1, 2027.
Family trusts and non-resident beneficiaries
A family trust generally cannot move property to a non-resident beneficiary tax-free. The budget closes an indirect route: tax-deferred distributions would be denied if the property goes to a corporation or partnership that has a direct or indirect non-resident shareholder or partner. This one applies to distributions on or after November 5, 2026, the budget date, so anyone planning a trust distribution involving real estate should talk to us first.
Rental housing and interest deductions
The 2024 budget proposed an exception to the interest limitation rules (EIFEL) for borrowing used to buy, build or convert purpose-built rental housing. It has not been passed yet. Budget 2026 would widen it to cover borrowing used by another entity in the same corporate group, or by a partnership where the borrower and its affiliates hold at least 40%. That could help developers with group structures. Our read is that the expansion would apply retroactively.
Builders, developers and the new equipment write-off
The Productivity Mega Deduction (full first-year write-off for most new equipment and technology bought on or after September 15, 2026) lists construction vehicles among eligible assets, and the budget presents it as a help for homebuilders. It excludes certain long-lived buildings, so a building itself should not be assumed to qualify. See Budget 2026 for business owners.
The new $15 million capital gains exemption and real estate
The new Canada Growth Incentive exemption for investors in Canadian businesses specifically excludes businesses in the real estate sector (along with several others). Owners of property companies should not plan on it.
Possible upsides and things to watch
- New-home buyers (including those from abroad) could bring fresh investment to housing supply.
- Higher insured price limit and 30-year options could help first-time and new-build buyers.
- More ways to finance small multi-unit and mid-size rental buildings.
- Lower withholding means less cash tied up for corporate sellers.
- Faster non-resident rollovers.
- Legislation timing for the foreign buyer extension, and what “new” means.
- Longer amortizations cost more interest over time.
- The trust distribution rule starts on budget day.
- Many proposals still need draft legislation and consultation.
- Provincial and local taxes still apply on top of anything federal.
What it could mean for you
- Home buyers: ask your lender when the $1.5 million limit and 30-year option start, and whether your purchase qualifies.
- Home sellers: under the proposal the foreign buyer ban continues for existing homes, so the group of eligible buyers for resale homes stays the same as today.
- Non-residents and their advisors: check the new-home exemption wording once the bill is tabled, and add the BC 20% tax to your numbers.
- Developers and builders: look at the equipment write-off, the EIFEL widening, federal land programs and the new mortgage insurance options for small multi-unit projects.
- Landlords and property owners: we did not find new income tax rules for rental income in the budget text. Your BC filings (Speculation and Vacancy Tax, Empty Homes Tax) are unchanged.
- Lawyers and notaries: watch for the new-home definition, the 30-day section 85 notice and the lower withholding rates from January 1, 2027, since these affect closing instructions.
Not sure how any of this fits your situation? Contact the firm or send us a note through the budget question form.
More on Budget 2026
- Real Estate News
- Budget 2026 hub: summary, key numbers and dates
- For business owners
- For lawyers and law firms
- For doctors, dentists and clinics
- For individuals and families
- For real estate: foreign buyers, mortgages and property tax
- The official budget at budget.canada.ca
Key takeaway: The foreign buyer ban extended to 2029 with new homes exempt, mortgage insurance changes, Build Canada Homes, and tax rules for property sellers and trusts.
Official sources
- Budget 2026: Masters of our destiny (budget.canada.ca)
- Department of Finance Canada
- BC government: additional property transfer tax
Reviewed . This is general information, not legal or tax advice. Rules and rates change, so confirm current requirements with the official sources above and speak to the firm about your situation.
Prepared by HJ Wu & Company Inc. (CPA). General information only, not personal advice. How the guides are written and reviewed.
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