Buying a Home in Canada as a Newcomer
Permanent residents can buy a home in Canada like citizens. Many work permit holders with at least 183 days left on their permit, and some students, are exempt from the federal ban on purchases by non-Canadians, which runs until January 1, 2027. The minimum down payment is 5% of the first $500,000.
183 days
Validity left on a work permit on the date of purchase, for the work-permit exception
January 1, 2027
The date the federal ban on purchases by non-Canadians currently runs until
5%
The minimum down payment on the first $500,000 of the price
$10,000
The maximum fine for a prohibited purchase
Rules and figures in this area change often. The down payment tiers are FCAC’s, and the ban is set by the Non-Canadians Act.
Who can buy a home in Canada as a newcomer?
The restriction targets people who are not citizens or permanent residents. Under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, certain non-Canadians are temporarily prohibited from buying some residential property. The federal government extended it, so that it currently applies until January 1, 2027.
- Permanent residents
- Exempt. They can buy residential property like any other resident.
- Work-permit holders
- Many are exempt. Under the current regulations a person authorized to work in Canada can generally buy if their work permit or authorization has at least 183 days of validity remaining on the date of purchase. They must also not have bought more than one residential property.
- International students
- May be eligible to buy if they meet specific conditions.
- Protected persons and refugee claimants
- Protected persons and certain refugee claimants are also exempt.
The exact conditions have been amended since the ban began, so the precise tests can change. Because this is a temporary measure that has already been extended once, confirm its current status and expiry on official sources before relying on it.
The rule
Permanent residents and Canadian citizens are not restricted by the foreign-buyer ban and can buy residential property like anyone else.
Which homes and places does the ban cover?
The ban generally covers residential property with three dwelling units or fewer, including detached houses, semi-detached houses, and condominium units. It applies only within census metropolitan areas and census agglomerations (urban areas of at least 10,000 people, per CMHC), so property outside them is not covered.
If you are on a work permit or study permit, check whether you meet an exception and whether the property and location are covered before you make an offer. A prohibited purchase can bring a fine of up to $10,000, and a court may order the property sold.
How much down payment do you need?
Canada sets a minimum down payment that increases with the price of the home. The Financial Consumer Agency of Canada (FCAC) sets it out in three tiers.
| Price of the home | Minimum down payment |
|---|---|
| $500,000 or less | 5 percent of the price. |
| Between $500,000 and $1.5 million | 5 percent of the first $500,000 plus 10 percent of the portion above $500,000. |
| $1.5 million or more | 20 percent of the purchase price. |
With less than 20 percent down, you typically need mortgage loan insurance, from CMHC or a private mortgage insurer. FCAC’s page also sets out when that insurance is not available. This insurance protects the lender, not you, and the premium can be added to your mortgage or paid up front.
A lender may also ask for insurance even with 20 percent down, which FCAC says is usually the case if you are self-employed or have a poor credit history. A larger down payment lowers or removes this premium and reduces the amount you borrow. Confirm the current figures on FCAC’s page before you plan around them.
Can you get a mortgage without Canadian credit history?
Lenders normally look at your Canadian credit history to approve a mortgage. Some lenders offer newcomer mortgage programs for permanent residents and many work-permit holders who have limited or no Canadian credit history. These programs may accept alternative documents in place of a domestic credit score, and some can consider a foreign credit report, though terms and eligibility differ by lender.
Common expectations include proof of immigration status (such as a PR card or a valid work permit), and proof of employment and income. CMHC, for example, says it may consider an international credit report or a letter of reference from your financial institution in your country of origin.
Mortgage default insurers also run newcomer programs that lenders use, which is part of how a newcomer can qualify with as little as 5 percent down. Each lender sets its own rules and makes its own decision.
What land transfer tax and closing costs do you pay?
On top of the down payment, buyers pay closing costs, and one of the largest is land transfer tax (sometimes called property transfer tax). This is charged by the province, and in some cities (for example Toronto) there is an additional municipal land transfer tax on top of the provincial one. Rates and rules differ by province.
Some provinces offer a first-time home buyer refund or exemption that can reduce or remove this tax, within limits each province sets. There is also a GST/HST new housing rebate for some newly built homes.
Some of this relief requires citizenship or permanent residence, which can affect newcomers on temporary status:
- Ontario limits its first-time homebuyers refund to Canadian citizens and permanent residents.
- British Columbia’s first-time home buyers’ exemption requires you to be a citizen or permanent resident, with a possible refund if you become one by the first anniversary of registration.
Because these thresholds and amounts are updated from time to time, confirm the current figures with the provincial or municipal authority.
Other closing costs commonly include legal or notary fees, a home inspection, title insurance and property tax adjustments (FCAC’s examples). Add any mortgage loan insurance premium, plus the provincial sales tax on that premium in Ontario, Manitoba and Quebec, which FCAC says your lender cannot add to your mortgage. FCAC says to be prepared to spend between 1.5 and 4 percent of the home’s purchase price on closing costs, but the real figure depends on your province and situation.
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What do people ask?
Can a newcomer or permanent resident buy a house in Canada?
Yes, in most cases. Permanent residents and citizens can buy residential property without restriction. Many work permit holders and some international students can also buy if they meet an exception to the federal ban on purchases by non-Canadians. Confirm that your status fits an exception before you make an offer. Section 4 of the Prohibition on the Purchase of Residential Property by Non-Canadians Act sets the rule.
What is the foreign-buyer ban, and does it apply to me?
It is a federal law that bars some people who are neither citizens nor permanent residents from buying residential property with three or fewer dwelling units, only within census metropolitan areas and census agglomerations (urban areas of at least 10,000 people). The government extended it to January 1, 2027. Permanent residents are exempt, and so are many work permit holders, some students and protected persons. The Non-Canadians Act, s.4, and the Finance Canada notice in the sources below set it out.
Can I buy a home on a work permit or study permit?
Often yes. A person authorized to work in Canada can generally buy if their work permit has at least 183 days of validity left on the purchase date and they have not bought more than one residential property. International students can buy if they meet specific conditions, which have changed since the ban began. Check the current test before you sign anything. The CMHC questions and answers on the Non-Canadians Act, in the sources below, list the exceptions.
How much down payment do I need as a newcomer?
Under FCAC's table: 5% for a home of $500,000 or less; 5% of the first $500,000 plus 10% of the portion above it for a home up to $1.5 million; and 20% of the price at $1.5 million or more. A $700,000 home needs at least $45,000 down. With less than 20% down, the mortgage usually needs default insurance. Newcomer programs can allow 5% down for buyers who meet their rules. The Cost of Living by Province guide helps you budget.
Can I get a mortgage without Canadian credit history?
Possibly. Some lenders run newcomer mortgage programs for permanent residents and many work permit holders with little or no Canadian credit. They may accept extra documents in place of a credit score and may consider a foreign credit report. Each lender decides. The Build a Credit Score as a Newcomer guide explains how to start a Canadian credit file.
What is mortgage default insurance, and do I have to pay it?
Default insurance protects the lender, and it is usually required when your down payment is under 20%. It comes from CMHC or a private mortgage insurer. The premium can be added to your mortgage or paid up front, and a down payment of 20% or more generally removes the requirement. The Banking and Credit for Newcomers guide covers working with Canadian lenders.
What is land transfer tax, and are there rebates for newcomers?
Land transfer tax is a closing cost charged by the province, and some cities, such as Toronto, add their own. Some provinces offer first-time buyer refunds or exemptions, and some of those require citizenship or permanent residence, as Ontario's refund and British Columbia's exemption do, which can exclude people on temporary status. Rates and rules differ by province. The Taxes for New Immigrants guide covers the wider tax picture.
What other closing costs should I plan for?
FCAC's examples are legal or notary fees, a home inspection, title insurance and property tax adjustments. Add any mortgage loan insurance premium, plus the provincial sales tax on it in Ontario, Manitoba and Quebec. FCAC says to be prepared to spend 1.5% to 4% of the purchase price, though the real amount depends on your province. A licensed mortgage professional can give a closer figure. The Cost of Living by Province guide helps you plan the rest of the budget.
Official sources
This page is based on law and policy published by the Government of Canada.
- Prohibition on the Purchase of Residential Property by Non-Canadians Act, s.4, Justice Laws
- Finance Canada: Government announces two-year extension to ban on foreign ownership of Canadian housing
- CMHC: Prohibition on the Purchase of Residential Property by Non-Canadians Act, frequently asked questions