Canada’s foreign buyer ban could soon change, opening the door for non-Canadians to purchase newly built homes while keeping restrictions on existing residential properties.
On November 5, 2026, the federal government announced plans to extend the foreign home buyer ban until January 1, 2029, while introducing an exemption for newly constructed residential properties.
The proposed change could benefit BC’s new housing market, particularly condominium developments and presale projects. For foreign buyers considering property in Victoria or elsewhere in British Columbia, there is an important distinction: the federal exemption would not eliminate BC’s 20% foreign buyer tax.
Here is what the proposed changes mean and what buyers should know before making a purchase.
What Is Changing With Canada’s Foreign Buyer Ban?
Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act came into effect on January 1, 2023. It generally prevents non-Canadians from purchasing certain residential properties in designated urban areas, subject to specific exceptions.
The federal ban is currently scheduled to expire on January 1, 2027.
Under Budget 2026, the government proposes two changes:
- Existing homes: The ban on foreign purchases of existing and resale residential properties would continue until January 1, 2029.
- Newly built homes: New residential properties would become exempt from the federal purchase restrictions.
The government’s stated goal is to protect access to existing housing for Canadians while encouraging investment in new residential construction.
These changes are not yet law. The federal government must introduce and pass the necessary legislation and establish the regulations governing the exemption.
Until then, the existing restrictions continue to apply.
Can Foreign Buyers Purchase New Homes in BC?
Under the proposed federal exemption, foreign buyers who are currently restricted from purchasing certain residential properties could become eligible to purchase newly built homes.
This could create opportunities for buyers interested in new condominiums, townhouses and other residential developments.
The exemption may be particularly relevant to BC’s presale condominium market, where developers often rely on advance sales to secure construction financing.
Several details remain unanswered, including:
- What will legally qualify as a newly built residential property?
- Will the exemption cover presale contracts signed before construction is completed?
- Will previously completed but unsold new homes qualify?
- When will the exemption officially take effect?
These questions will need to be addressed through legislation and regulations.
Foreign buyers should not assume that a new construction purchase is permitted simply because the exemption has been announced.
Does BC’s 20% Foreign Buyer Tax Still Apply?
Yes. This is one of the most important distinctions for foreign buyers considering property in British Columbia.
BC imposes an additional property transfer tax of 20% on foreign nationals, foreign corporations and certain taxable trustees purchasing residential property in designated areas.
These areas include:
- The Capital Regional District, including Victoria, Langford, Saanich, Oak Bay and surrounding communities
- Metro Vancouver
- The Fraser Valley Regional District
- The Regional District of Nanaimo
- The Regional District of Central Okanagan
This provincial tax is separate from the federal foreign buyer ban.
Even if a foreign buyer becomes eligible to purchase a newly constructed home under the proposed federal rules, the provincial additional property transfer tax may still apply.
Example: Buying an $800,000 New Condo in Victoria
Consider a foreign buyer purchasing a newly constructed condominium in Victoria for $800,000.
| Expense | Amount |
|---|---|
| Purchase price | $800,000 |
| BC additional foreign buyer tax (20%) | $160,000 |
| Total before other taxes and closing costs | $960,000 |
The $160,000 additional tax is payable on top of the regular property transfer tax and other applicable purchase costs, assuming no provincial exemption applies.
This illustrates why the distinction between federal purchase eligibility and provincial taxation matters.
The Province of BC provides further information about additional property transfer tax requirements and exemptions.
Will the Exemption Help BC’s Housing Market?
The proposed exemption could provide new opportunities for developers and purchasers, particularly in markets where sales of new construction have slowed.
Presale purchases help developers demonstrate demand and obtain financing for residential projects. Expanding the pool of eligible purchasers could support developments that might otherwise face delays.
The actual impact will depend on several factors, including the final federal regulations, demand from foreign buyers and BC’s continuing provincial tax requirements.
In Greater Victoria, where housing construction and affordability remain ongoing concerns, the proposal may be relevant to developers planning new residential projects.
What About Existing Homes and Resale Properties?
The proposed exemption is intended for new residential properties, not existing homes.
Under Budget 2026, restrictions on foreign purchases of existing and resale properties would continue until January 1, 2029.
The federal legislation already contains exceptions for certain purchasers and transactions. Depending on the circumstances, these may include eligible temporary residents, protected persons and other buyers who meet specific statutory requirements.
Those existing exemptions should not be confused with the proposed new-home exemption.
Buyers should confirm their eligibility before entering into a purchase agreement.
Is the Federal Exemption the Same as BC’s Newly Built Home Property Transfer Tax Exemption?
No. These are two separate programs.
The proposed federal exemption concerns whether certain non-Canadians are legally permitted to purchase a new residential property.
BC’s existing Newly Built Home Exemption, by comparison, can reduce or eliminate the regular provincial property transfer tax for qualifying purchasers who meet residency, occupancy and other requirements.
Eligibility for the provincial program is not automatically established by purchasing a newly built home.
For more information about provincial property transfer tax, see Tathgar Law’s BC Property Transfer Tax Guide and Calculator.
What Should Foreign Buyers and Developers Do Now?
Although the proposal could create opportunities in BC’s new construction market, buyers and developers should approach potential transactions carefully.
Before entering into a purchase agreement, the following matters should be reviewed:
- Federal eligibility: Whether the proposed exemption has become law and whether the particular property and purchaser qualify.
- Provincial tax obligations: Whether BC’s 20% additional property transfer tax applies.
- Contract conditions: Whether the purchase agreement adequately addresses regulatory uncertainty, financing and completion requirements.
- Additional costs: Whether regular property transfer tax, GST and other closing expenses apply.
These considerations are especially relevant when purchasing presale properties, where the agreement may be signed long before the anticipated completion date.
A real estate lawyer can review the applicable rules and contractual obligations before a buyer becomes legally committed.
Frequently Asked Questions
Is Canada’s foreign buyer ban ending in 2027?
The current legislation is scheduled to expire on January 1, 2027. Budget 2026 proposes extending the ban on existing residential properties until January 1, 2029. The extension has not yet been enacted.
Can foreigners buy new construction homes in Canada in 2027?
The federal government has proposed exempting newly built residential properties from the foreign buyer ban. The effective date and eligibility requirements have not yet been finalized. Until the changes become law, existing restrictions remain in effect.
Do foreign buyers still pay the 20% tax in Victoria?
Yes. BC’s additional 20% property transfer tax remains applicable to foreign buyers purchasing residential property in designated areas, including Victoria and the Capital Regional District, unless a provincial exemption applies.
Will foreign buyers be allowed to purchase presale condos?
The proposed exemption may create opportunities for foreign buyers purchasing presale condominiums. The government has not yet published the detailed rules specifying which new properties and transactions will qualify.
Is the foreign buyer ban the same as BC’s foreign buyer tax?
No. The federal ban restricts certain purchases of residential property by non-Canadians. BC’s foreign buyer tax is a separate provincial tax imposed on qualifying purchases in designated regions. A buyer may be permitted to purchase a property under federal law while still being required to pay the provincial tax.
Can foreign buyers qualify for property transfer tax exemptions in BC?
Certain exemptions and refunds are available under provincial legislation, depending on the buyer’s circumstances. Eligibility is specific to the applicable exemption and should be confirmed before completing a purchase.
Buying or Developing Property in Victoria, BC?
The proposed changes to Canada’s foreign buyer ban could affect residential property purchases and new construction projects throughout British Columbia. Understanding the difference between federal purchase restrictions and provincial tax obligations is essential before proceeding.
For guidance on purchase agreements, presale transactions and property transfer requirements, contact Sunny Tathgar at Tathgar Law.
Learn more about real estate legal services in Victoria, BC, or contact Sunny Tathgar to discuss an upcoming transaction.
This article reflects the proposed federal changes announced on November 5, 2026. The proposal has not yet become law. Information is current as of November 9, 2026 and is provided for general educational purposes.
