Canada Weighs Options as Foreign Homebuyer Ban Nears 2027 Expiry
Finance Minister François-Philippe Champagne says the federal government is reviewing all options ahead of the January 1, 2027, expiration of Canada’s ban on foreign homebuyers. Economists and developers urge changes to unlock capital for new housing, while political sensitivity remains high as younger Canadians struggle with affordability.
Canadian Finance Minister François-Philippe Champagne has stated that the federal government is considering all options ahead of the expiry of Canada’s foreign homebuyers ban, which is scheduled to end on January 1, 2027.
The prohibition on foreign purchases of residential real estate was introduced under former Prime Minister Justin Trudeau’s government. The Financial Post reports the ban took effect in 2023, while Global News states it was first enacted in 2022. The measure included exemptions for vacant land intended for development and larger multi-unit buildings. In 2024, the government renewed the policy, extending it by two years from its original expiration date of January 2025.
Data indicates that foreigners owned no more than five per cent of properties in any major Canadian market in 2020. Despite this relatively low share, the national benchmark home price is now roughly 20 per cent below its peak following interest rate hikes by the Bank of Canada starting in 2022.
Housing Minister Gregor Robertson stated last year that the government would use 2026 to review the policy and examine international models such as Australia's, where foreigners are permitted to purchase newly built homes.
Developers argue that the ban cuts off a source of capital needed to fund new housing construction. Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce, has called for the government to let the ban expire to help finance new housing projects. Mike Moffatt, who leads the University of Ottawa’s Missing Middle Initiative, suggested the government should either let the ban expire or amend it to allow foreign buyers to purchase new homes. Allowing offshore buyers back into the market could help finance new housing projects and boost supply.
The issue remains politically sensitive because many younger Canadians remain priced out of home ownership. Additionally, the ban has made it harder for Canadian companies and institutions to hire talent.