Thinking of buying or selling a home in canada this year from the US? Buying property in Canada as a U.S. citizen has historically been a straightforward process, but the landscape shifted dramatically in recent years. As of 2026, the market is defined by a blend of federal restrictions, regional taxes, and specific opportunities for those who know where to look. While the “Foreign Buyer Ban” remains a headline-grabbing hurdle, it is far from an absolute wall.
This comprehensive guide breaks down the current regulations, tax implications, and the step-by-step process for Americans looking to own a piece of the Great White North.
The Current Legal Landscape: The Foreign Buyer Ban
The most significant factor in 2026 is the Prohibition on the Purchase of Residential Property by Non-Canadians Act. Originally introduced in 2023 for a two-year term, the Canadian government extended this ban through January 1, 2027.
For most U.S. citizens who do not hold Canadian permanent residency, this means purchasing “residential property”—defined as buildings with three or fewer dwelling units—is prohibited in major urban centers. However, the law is nuanced. The ban primarily targets Census Metropolitan Areas (CMAs) and Census Agglomerations (CAs). These are essentially cities and large towns with populations over 10,000.
If you are looking for a vacation home, a rural retreat, or a cottage in a less populated area, you are likely in the clear. Many of Canada’s most scenic regions fall outside these designated zones, making secondary homes and recreational properties accessible to American buyers despite the federal ban.
Key Exemptions for U.S. Buyers
Even within major cities, certain Americans can still purchase property. The 2023 amendments and 2024 extensions clarified several “escape hatches”:
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Work Permit Holders: If you are a U.S. citizen working in Canada on a valid permit with at least 183 days of validity remaining, you are eligible to purchase a single residential property.
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International Students: Students who have spent the majority of the previous five years in Canada and meet specific tax-filing thresholds can purchase a property up to $500,000.
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The “Development” Clause: The ban does not apply to non-Canadians purchasing property for the purpose of development. If you intend to convert a property or build new units, you may be exempt, though this requires a clear business intent.
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Vacant Land: In a significant shift, vacant land zoned for residential or mixed-use is now exempt from the ban, allowing Americans to purchase land and build their own homes.
Navigating the Tax Maze: Upfront and Ongoing Costs
In Canada, real estate isn’t just about the sticker price; it’s about the “tax stack.” American buyers need to prepare for three distinct levels of taxation.
1. Land Transfer Taxes (LTT)
Every province in Canada charges a Land Transfer Tax at the time of closing. In some cities, like Toronto, there is an additional municipal tax. Generally, these range from 0.5% to 2.5% of the total property value.
2. Non-Resident Speculation Tax (NRST)
If you are buying in Ontario or British Columbia, be prepared for a significant surcharge. Ontario’s NRST, for instance, is a whopping 25% for non-resident buyers. While there are rebates available for those who eventually gain permanent residency or work in the province for a set period, the upfront cost is a major barrier for casual investors.
3. The Underused Housing Tax (UHT)
The UHT is a federal 1% annual tax on the value of residential property owned by non-Canadians that is considered “vacant or underused.” To avoid this, you generally must ensure the property is occupied for at least 180 days of the year. Even if you are exempt, you are still required to file an annual UHT return with the Canada Revenue Agency (CRA). Failure to file can result in steep penalties, even if no tax is actually owed.
Financing Your Purchase: The Canadian Mortgage
Can Americans get a mortgage in Canada? Yes, but the requirements are stricter than for residents. Canadian lenders view non-residents as “high risk” because they lack a local credit history and their assets are located in another jurisdiction.
The Down Payment Requirement
While a Canadian citizen might buy a home with 5% down, a U.S. non-resident will typically need a 35% down payment. This is a standard requirement across major banks like RBC, TD, and Scotiabank. These funds must be in a Canadian bank account for at least 30 to 90 days prior to closing to satisfy anti-money laundering (AML) regulations.
Credit and Documentation
Lenders will scrutinize your U.S. financial health. You will need to provide:
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Two years of U.S. tax returns.
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A certified U.S. credit report (Equifax or TransUnion).
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Proof of income and employment.
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Bank statements showing the source of your down payment.
It is also worth noting that Canadian mortgages function differently than U.S. ones. While the U.S. favors 30-year fixed rates, Canada typically uses 5-year terms with a 25-year amortization. After five years, you must “renew” your mortgage at the current market rate.
The Step-by-Step Buying Process
The actual process of buying a home in Canada is remarkably similar to the U.S., with a few legal distinctions.
Step 1: Assemble Your Team
You should not fly solo. You need a Real Estate Agent who understands non-resident transactions and a Real Estate Lawyer. In Canada, lawyers handle the closing, title search, and fund transfers—there are no “escrow companies” like in California or other U.S. states.
Step 2: Get Pre-Approved
Before viewing homes, get a pre-approval from a Canadian lender. This confirms your budget and ensures you meet the 35% down payment threshold.
Step 3: The Offer and Deposit
Once you find a property, your agent will help you draft an Agreement of Purchase and Sale. In Canada, it is standard to provide a deposit (usually 5% of the purchase price) within 24 hours of the offer being accepted. This money is held in trust by the seller’s brokerage.
Step 4: Due Diligence
Most offers are “conditional” on a home inspection and financing. In 2026, it is vital to add a condition regarding the Foreign Buyer Ban, ensuring your lawyer can verify that the specific property is legal for you to purchase.
Step 5: The Closing
On closing day, your lawyer will coordinate with your lender, pay the Land Transfer Taxes, and register the deed in your name. You will rarely need to be physically present; most documents can now be signed via secure digital platforms or at a local notary’s office in the U.S.
Life After the Purchase: Management and Resale
Owning property in Canada comes with ongoing responsibilities. If you plan to rent the property, the CRA requires you to pay a 25% withholding tax on the gross rental income. You can file an election to be taxed on net income instead, which allows you to deduct expenses like insurance, repairs, and property management fees.
When it comes time to sell, the process is slightly more complex for Americans. The CRA will typically withhold 25% of the total sale price until a “Certificate of Compliance” is issued, verifying that all capital gains taxes have been paid. This can take several months, so sellers should plan their cash flow accordingly.
Buying property in Canada as a U.S. citizen in 2026 is an exercise in precision. While the federal ban has limited options in the heart of Vancouver or Toronto, the “recreational” and “development” sectors remain vibrant and accessible. By securing a robust down payment and navigating the provincial tax hurdles, Americans can still find incredible value and a high quality of life across the border.
