Foreign Buyer Restrictions in Ontario: What You Should Know with Your Real Estate Lawyer in Toronto

If you are planning to buy a home or investment property in the Greater Toronto Area (GTA), working with an experienced real estate lawyer is essential. Whether you are located in Scarborough, North York, or Etobicoke, or nearby cities such as Mississauga, Brampton, or Vaughan, professional legal guidance ensures a smooth and compliant property transaction.

This article explains how the Prohibition on the Purchase of Residential Property by Non-Canadians Act affects real estate purchases, who is impacted, and why consulting a real estate lawyer in Toronto and surrounding regions is crucial.

What the Act Does

The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect on January 1, 2023. The law prohibits most non-Canadians from purchasing residential property in urban and metropolitan areas across Canada. A non-Canadian is defined as anyone who is not a Canadian citizen, permanent resident, or registered under the Indian Act. It also includes foreign corporations and Canadian corporations controlled by non-Canadians.

Residential property includes detached houses, semi-detached homes, row houses, condominiums, and similar dwellings with up to three units, as well as vacant land zoned for residential or mixed use. The ban also applies to indirect purchases made through corporations, partnerships, or trusts.

Duration and Extension of the Ban

Originally, the foreign buyer ban was set to expire on January 1, 2025. However, on February 4, 2024, the federal government extended it until January 1, 2027. For buyers and investors in Toronto, Scarborough, North York, and Etobicoke, this means restrictions will remain in place for at least two more years. An experienced real estate lawyer can help you plan transactions accordingly and ensure compliance with the ongoing rules.

Who Is Impacted and Who Is Exempt

The ban primarily affects non-Canadian individuals and entities, including foreign corporations or Canadian corporations under foreign control. The restrictions apply to residential properties located in census metropolitan areas or census agglomerations, which include most of the GTA.

There are several exemptions under the Act. Canadian citizens, permanent residents, and individuals registered under the Indian Act are not affected. Non-Canadians who entered into purchase agreements before January 1, 2023, are also exempt. Temporary residents, refugees, and protected persons may qualify for specific exemptions, and some vacant land or property acquired for development purposes may be excluded depending on its zoning and use.

Why This Matters for Real Estate Transactions in the GTA

If you are buying or selling property in Scarborough, North York, Etobicoke, or other parts of the GTA, working with a qualified real estate lawyer is vital. A lawyer ensures due diligence, confirms buyer eligibility, and identifies potential title or ownership risks. Since the ban has been extended, buyers must factor in the new timeline when making investment or financing decisions. For corporate or trust-based purchases, a lawyer will review ownership structures to confirm compliance.

It is also important to note that professionals such as realtors, lawyers, and developers can face penalties if they knowingly assist in a prohibited transaction.

Interplay with Ontario’s Non-Resident Speculation Tax (NRST)

In addition to the federal ban, Ontario enforces a Non-Resident Speculation Tax, currently set at 25 percent province-wide. Even if a buyer is exempt under the federal law, they may still owe this provincial tax. A real estate lawyer in Toronto, Scarborough, North York, or Etobicoke will help ensure compliance with both federal and provincial regulations. They also handle related issues such as zoning, permits, and land transfer requirements, helping clients avoid costly penalties.

Services Provided by a Real Estate Lawyer

A real estate lawyer in the GTA provides full legal support throughout the buying or selling process. This includes reviewing the purchase and sale agreement to ensure compliance, conducting title searches and due diligence, managing the conveyancing and closing process, and preparing all necessary legal documentation. The lawyer also handles mortgage and refinancing legal work and advises on eligibility for temporary residents or corporations. If a violation of the Act occurs, your lawyer will provide legal advice and representation to resolve the issue efficiently.

Important Tips for Buyers and Sellers

Buyers should always consult a real estate lawyer before signing an agreement to confirm their eligibility to purchase property. Sellers must verify that buyers meet the legal requirements to avoid delays or cancellations. Corporations or trusts need to maintain ownership transparency to prevent violations. It is also essential to consider the extension of the ban to 2027 when making investment plans. In addition, Ontario’s Non-Resident Speculation Tax and municipal taxes continue to apply, making legal guidance crucial for compliance with all levels of regulation.

Conclusion

Whether you are purchasing a home or investing in residential property in Scarborough, North York, or Etobicoke, partnering with an experienced real estate lawyer ensures your transaction complies with all legal requirements. The combination of the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, Ontario’s Non-Resident Speculation Tax, and local property regulations makes real estate transactions in the GTA more complex than ever. With professional legal guidance, buyers and sellers can move forward confidently, avoid penalties, and complete their transactions smoothly.

If you are preparing to buy or sell a property in the GTA, contact a trusted real estate lawyer today to help guide you through every step of the process.