Buying property in Toronto as a foreigner means dealing with strict restrictions and extra costs. As of April 2025, Canada’s federal ban on foreign buyers is still active until at least 2027. That ban covers most types of residential properties. However, there are exceptions based on immigration status or location.
If you’re a temporary resident with a valid work or study permit, and you’re planning to live in the home as your main residence, you may be exempt. This exemption also requires you to move in within 60 days after the purchase closes. Vacation homes and commercial properties aren’t covered by the ban either.
Taxes You’ll Face
Taxes for non-resident buyers in Toronto are steep. The province of Ontario applies a 25 percent Non-Resident Speculation Tax on purchases. In addition, Toronto added a 10 percent Municipal Non-Resident Speculation Tax at the start of 2025. Combined, buyers pay 35 percent more upfront than locals in taxes alone.
Other costs include land transfer taxes. For example, if you buy a home worth $1 million, the combined provincial and municipal land transfer taxes will cost around $32,950. Unlike some residents, you won’t qualify for rebates on these taxes unless you become a permanent resident.
If you sell the property later, a 25 percent withholding tax applies to any gains. You’ll need to file annual Canadian tax returns as long as you own the home. If you rent it out, you’ll pay income taxes on that as well.
Complex But Doable: The Buying Process
Foreign buyers usually need a 35 percent down payment. Some banks and private lenders allow financing without a social insurance number. Interest rates are higher for these loans — often between 9 and 12 percent.
To start the process, you’ll need:
– A Canadian bank account
– Proof of income or assets
– Help from a local agent who can manage everything, especially if buying remotely
Once you’ve found the right property, offers and contracts can be signed online. Deposits must be made using certified bank drafts from a Canadian account.
Remote home buying is now common. Around 78 percent of foreign purchases were completed using digital tools like 3D walkthroughs and electronic signatures.
Examining Buyer Patterns Through Local Online Behavior
Foreign interest in Toronto housing shows up in online search traffic and listing engagement data. Terms like homes for sale in Toronto often spike following international policy changes, currency swings, or tax announcements. A marked increase came in February 2025 after the city’s 10% municipal non-resident speculation tax was implemented. This trend wasn’t isolated—searches about Canadian mortgage options also went up.
Some foreign buyers focus their research on neighborhoods with high resale potential or rental yield. Areas like Bayview Village, Leslieville, or Roncesvalles often appear in the same browsing sessions that include homes for sale in Toronto, price per square foot, and local school ratings. These search patterns offer hints into buyer intent and short-listing behavior.
How Foreign Buyers Affect the Market
Foreign buyers make up about 3.7 percent of all sales in Toronto. But in some parts of the city, their impact is stronger. Richmond Hill, where over 60 percent of residents were born outside Canada, saw prices rise 137 percent above income levels since 2015.
Luxury condos are especially attractive. Buyers from China accounted for 38 percent of Toronto condo sales over $5 million in 2024. In these high-end markets, parking spaces are being sold separately for as much as $150,000.
Commercial properties have become a loophole. Since the federal ban doesn’t cover commercial real estate, foreign investors have turned to mixed-use buildings. In 2024, nearly 1 in 5 small commercial sales in Toronto involved overseas buyers. Some buyers use shell companies with Canadian partners to sidestep restrictions and purchase vacation homes in areas like Muskoka.
Foreign buyers also look for income-generating features. Legal basement suites are in high demand. Investors are willing to pay 12 percent more for homes with separate rental units. Cultural preferences also play a role: some buyers ask for religious-compliant mortgage arrangements or prioritize access to specific community services.
Reality of Enforcement
Government enforcement still has gaps. In 2024, 14 percent of restricted foreign purchases were made through nominee buyers or side agreements. The Canada Revenue Agency is now using blockchain tracing tools to monitor cross-border transactions. In one quarter alone, it flagged $182 million worth of suspicious activity.
Meanwhile, sanctions and political movements are shaping who buys and how. For instance, the war in Ukraine and sanctions on Russia have fueled luxury condo purchases through cryptocurrency. At the same time, Brazilian buyers are using agricultural investor visas to buy land in surrounding areas like Durham.
Conclusion
Buying a home in Toronto as a foreigner in 2025 is possible under strict rules. Temporary residents with proper permits still have a path, but they face high upfront taxes and tough screening. Most foreign investors are shifting toward commercial or high-end properties.
The market is currently favorable to buyers due to a sharp increase in listings, especially condos. But pricing hasn’t dropped much yet because most sellers aren’t in a rush. If you’re serious about buying, make sure to speak with a local agent who understands tax and legal issues for foreign clients.
Also read: Bedford Park: A Guide to Toronto’s Historic Neighborhood
