Canada’s federal foreign-buyer prohibition and provincial foreign-buyer taxes are separate rules. The federal law determines whether a covered non-Canadian may purchase residential property at all. A provincial tax is an additional closing cost that may apply when a purchase is permitted, including in some cases where a federal exception applies. Paying a provincial tax never makes a federally prohibited purchase lawful.
As of the latest official information available in October 2026, the federal prohibition is scheduled to expire on January 1, 2027. That is an announced expiry date, not a guarantee that the policy will end or that Parliament will not change it. Provincial taxes can continue independently. Ontario, British Columbia and Nova Scotia already use materially different rates, geographic scopes, property definitions and exemption rules.
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Start with two separate questions: can the buyer purchase, and what tax is due?
A buyer should analyze eligibility before calculating tax. Under section 4(1) of the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, “Despite section 34 of the Citizenship Act, it is prohibited for a non-Canadian to purchase, directly or indirectly, any residential property.” The prohibition is broad on its face, but the Act incorporates exceptions and regulations that define prescribed people, entities and circumstances.
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If an exception permits the acquisition, a provincial surcharge may still be payable. If no exception applies, paying a surcharge does not cure the federal problem. A purchase structured indirectly through a corporation, partnership or trust also requires a separate review; changing the name on title is not a reliable way to avoid either regime.
How the federal prohibition works in 2026
Who is potentially covered
The Act targets a “non-Canadian” purchasing residential property directly or indirectly. The detailed definition and prescribed classes are set by the statute and regulations. That means a person who is not a Canadian citizen or permanent resident should not assume that a temporary visa, a work permit, a study permit, a Canadian corporation or a Canadian co-owner automatically resolves eligibility.
Important statutory exceptions
The legislation includes exceptions for certain prescribed temporary residents who meet prescribed conditions, protected persons, and some non-Canadian spouses or common-law partners purchasing with a qualifying Canadian or protected person. It also allows regulations to prescribe additional classes and circumstances. The list should not be treated as exhaustive without checking the current regulations and the facts of the transaction.
The scheduled expiry date
Finance Canada announced on February 4, 2024 that the prohibition would be extended to January 1, 2027. As of the October 2026 information check, no later official source established what will happen after that date. A buyer signing a contract before January 1, 2027 should obtain advice based on the law in force at signing and closing; a buyer closing after that date should not assume the ban has disappeared unless an official update confirms it.
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Provincial comparison at a glance
| Jurisdiction | Additional charge | Where and to whom it applies | Key calculation or scope issue |
|---|---|---|---|
| Ontario | 25% Non-Resident Speculation Tax (NRST) | Covered residential acquisitions anywhere in Ontario by foreign nationals, foreign corporations or taxable trustees | In addition to ordinary Ontario land transfer tax; buyer classification, property interest, timing and rebate or refund rules matter |
| British Columbia | 20% Additional Property Transfer Tax | Covered buyers, trustees and entities acquiring residential property in specified areas, including the Capital Regional District and Fraser Valley Regional District | Applied to the fair market value of the buyer’s proportionate share; it does not apply uniformly throughout British Columbia |
| Nova Scotia | 10% Non-resident Provincial Deed Transfer Tax, effective April 1, 2025 | Non-resident purchasers of residential property or residential portions with three dwelling units or fewer, including certain vacant land | Residency, unit count, land classification, agreement date, exemptions and a move-to-Nova-Scotia exception can change the result |
The rates in this table are not interchangeable. Ontario’s stated rate is provincewide for covered acquisitions; British Columbia’s is location-limited; Nova Scotia’s uses a distinct deed-transfer-tax framework and a residential-unit threshold.
Ontario: a 25% surcharge across the province
Rate and covered buyers
Ontario’s current NRST rate is 25% for covered acquisitions. The tax applies to residential-property acquisitions anywhere in Ontario by foreign nationals, foreign corporations and taxable trustees, as defined in the provincial rules. It is charged in addition to the ordinary Ontario land transfer tax, so the NRST is not a substitute for the regular transfer tax.
What must be verified
The classification of the purchaser is only one part of the analysis. The transaction should be reviewed for the type of residential property or interest acquired, whether a corporation or trust is involved, the agreement and conveyance dates, and whether any statutory exemption, rebate or refund route is available. A buyer who expects to qualify for relief should confirm the conditions and documentation before closing rather than assuming the relief will be automatic.
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A person who is allowed to buy under a federal exception can still fall within Ontario’s foreign-national, foreign-corporation or taxable-trustee categories. Federal eligibility and Ontario tax liability must therefore be tested independently. Conversely, a buyer who is outside a federal exception cannot make the purchase legal merely by budgeting for the 25% charge.
British Columbia: 20% only in specified areas
Geographic limitation
British Columbia’s additional property transfer tax is 20% in specified areas. The stated areas include the Capital Regional District and the Fraser Valley Regional District. The surcharge is not a uniform provincewide tax, so a property’s municipal and regional location must be confirmed before estimating it.
Calculation based on the buyer’s share
The tax is calculated on the fair market value of the covered buyer’s proportionate share of residential property. For example, where a covered buyer acquires only a stated ownership interest, the relevant base is not automatically the entire property value. The title share, beneficial ownership and any trust or entity arrangement should be checked against the provincial definitions.
Exemptions and entity rules
British Columbia’s rules contain exemptions and detailed definitions for buyers, trustees and entities. A buyer should verify whether the parcel is inside a specified area, whether the buyer or holding structure fits a covered category, what proportion is acquired, and whether an exemption applies. A statement that “BC charges 20%” is incomplete without those geographic and ownership qualifications.
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Nova Scotia: a 10% non-resident deed-transfer tax
Rate and effective date
Nova Scotia’s non-resident Provincial Deed Transfer Tax rate became 10% on April 1, 2025. Earlier transactions may be governed by the prior rate, so the agreement and transfer dates need to be checked rather than applying today’s percentage to every deal.
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Residential scope
The provincial guidance covers residential property, or a portion deemed residential, with three dwelling units or fewer. It also includes certain vacant land considered residential. Unit count and the legal classification of the land can therefore matter as much as the purchaser’s residency.
Moving to Nova Scotia within six months
The guidance describes an exception for a buyer who intends to move to Nova Scotia within six months. That route involves stated intention and proof requirements. A buyer should document the move and confirm the evidence required by the province; simply saying that a move is planned is not the same as satisfying the exception.
Why the same buyer can face different outcomes
These regimes differ along seven practical axes:
- Legal mechanism: the federal rule is a purchase prohibition with exceptions; provincial measures are taxes imposed on specified acquisitions.
- Buyer definition: federal “non-Canadian,” Ontario foreign national or entity, British Columbia covered buyer or trustee, and Nova Scotia non-resident are not interchangeable labels.
- Geography: Ontario’s stated NRST scope is provincewide, British Columbia’s surcharge is limited to specified areas, and Nova Scotia uses its own provincial framework.
- Property type: residential use, the number of dwelling units, vacant land classification and the interest acquired can each affect coverage.
- Tax base: Ontario adds NRST to ordinary land transfer tax; British Columbia uses fair market value of the covered buyer’s proportionate share; Nova Scotia’s deed-transfer rules require their own calculation.
- Relief: all three systems have exemptions or other relief concepts, but the conditions and proof differ.
- Timing: agreement date, conveyance or registration date, and the federal expiry date can affect the analysis.
A practical eligibility-and-tax checklist
- Identify every purchaser. Record citizenship, permanent-resident or temporary-resident status, protected-person status, and whether a spouse or common-law partner is also acquiring an interest.
- Map the ownership structure. List corporations, partnerships, trusts and beneficial owners. Do not assume a Canadian-incorporated entity is outside the rules without checking the applicable definition.
- Describe the property precisely. Note the province, municipality and regional district; residential or vacant-land status; number of dwelling units; and the percentage or interest being acquired.
- Separate federal eligibility from provincial liability. First test whether the federal Act and regulations permit the purchase. Then test each provincial tax independently.
- Confirm all dates. Record the offer or agreement date, closing and registration dates, and whether the transaction falls before or after a rate change or the scheduled federal expiry.
- Calculate the correct base. Use the applicable provincial definition of value and ownership share. Do not multiply a headline rate by the total purchase price when the rule uses a proportionate share, and do not omit ordinary transfer tax where it remains payable.
- Check relief before closing. Review exemptions, rebates, refunds and residency-based exceptions, including Nova Scotia’s six-month move requirements and any Ontario or British Columbia documentation conditions.
- Obtain a written professional review. A Canadian real-estate lawyer or conveyancer can verify the current statute, regulations, provincial guidance, title structure and filing requirements for the live transaction.
Common mistakes and how to avoid them
“I can just pay the foreign-buyer tax.”
That confuses a tax with permission. A provincial payment does not legalize a purchase prohibited by the federal Act.
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“The federal ban means no foreign national can buy.”
The Act contains exceptions and regulations. Eligibility depends on the prescribed conditions, not on a headline description of the buyer.
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“BC’s 20% tax applies everywhere in the province.”
The additional tax is limited to specified areas. Confirm the parcel’s location before applying the rate.
“A Canadian corporation avoids the rules.”
Indirect ownership, entity definitions and beneficial interests matter. Corporate registration alone is not a complete analysis.
“Nova Scotia’s 10% rate applies to every property.”
The stated scope is residential property or residential portions with three dwelling units or fewer, including certain vacant land. Classification and unit count must be checked.
“A future move automatically creates an exemption.”
Nova Scotia’s move-related exception includes intention and proof requirements. Other provinces also impose their own conditions for relief.
What is still unknown after January 1, 2027
The announced federal expiry date does not establish whether the prohibition will end, be extended or be replaced. No conclusion about post-expiry law should be drawn from the date alone. Provincial governments may also amend rates, definitions, geographic boundaries or relief rules independently. Anyone planning a purchase that crosses 2026 and 2027 should obtain an updated review close to signing and again before closing.
How to get a transaction-specific answer
For a reliable answer, give the adviser a complete fact pattern: each buyer’s citizenship and immigration status; spouse or common-law-partner details; every corporation, trust or partnership involved; the property address and regional district; dwelling-unit count and land use; ownership percentages; agreement and closing dates; and the buyer’s intended residence after closing. Those facts determine whether the federal purchase is permitted and whether Ontario NRST, British Columbia’s additional property transfer tax, Nova Scotia’s non-resident deed-transfer tax, ordinary transfer taxes or a documented exemption must be addressed.
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