Buying property in Canada as an American – is it hard?

Yes, Americans can buy property in Canada, but your options are currently limited by the Prohibition on the Purchase of Residential Property by Non-Canadians Act. This 2023 law restricts foreign nationals from purchasing residential real estate in many areas until January 1, 2027. However, exceptions exist for certain property types and locations, and the rules don't apply if you have permanent resident status or a valid work permit.

Here's everything Americans need to know about buying property in Canada in 2026.

Can Americans Buy Property in Canada?

Yes, Americans can buy property in Canada, but your options are currently limited by the Prohibition on the Purchase of Residential Property by Non-Canadians Act.

This law, which came into effect on January 1, 2023, was designed to help cool Canada's overheated housing market and make homes more affordable for Canadian residents. It bans most foreign nationals, including Americans, from purchasing residential property in Canada for two years, until January 1, 2027.

What You Can Still Buy

The ban doesn't apply to all properties. Americans can still purchase:

• Recreational properties: Cottages, chalets, and other seasonal residences
• Properties in rural areas: Land and homes outside census metropolitan areas and census agglomerations with populations under 100,000
• Commercial real estate: Office buildings, retail spaces, and other non-residential properties
• Vacation properties: Properties intended for short-term recreational use

Who Is Exempt From the Ban?

Several categories of people are exempt from the foreign buyer ban:

• Canadian citizens and permanent residents
• Temporary residents with valid work permits (who have filed at least one tax return as a Canadian resident in the last five years)
• International students who meet specific criteria
• Refugees and protected persons
• Individuals purchasing property with a Canadian spouse or common-law partner

If you fall into one of these categories, you have the same property buying rights as Canadian citizens.

What Buying Property Gets You

It's important to understand that buying property in Canada doesn't automatically grant you any immigration rights or status. Owning a home in Canada does not:

• Give you the right to live in Canada permanently
• Provide a pathway to permanent residency or citizenship
• Allow you to work in Canada without a work permit
• Qualify you for Canadian healthcare or social benefits

Property ownership and immigration status are completely separate matters in Canada. If you want to spend extended time at your Canadian property, you'll need to comply with visitor visa requirements or obtain appropriate immigration status.

What Buying Property Does Not Get You

Real estate investment alone won't help you immigrate to Canada. Unlike some countries that offer "golden visas" or residency-by-investment programs, Canada doesn't tie property ownership to immigration benefits.

If you're interested in moving to Canada permanently, you'll need to explore proper immigration pathways such as Express Entry, Provincial Nominee Programs, or family sponsorship.

The Buying Process for Americans

Working With Real Estate Professionals

If you find a property you are eligible to buy, working with professionals who understand cross-border transactions is essential. Consider hiring:

• A Canadian real estate agent experienced with foreign buyers
• A real estate lawyer to handle the transaction and title transfer
• A tax advisor familiar with Canadian and US tax implications
• A currency exchange specialist to handle international transfers

Financing Your Purchase

Getting a mortgage in Canada as a non-resident can be challenging. Canadian lenders typically require:

• A larger down payment (usually 35-50% for non-residents)
• Proof of income and assets
• A strong credit history
• Canadian bank account

Many American buyers find it easier to pay cash or secure financing in the United States.

Currency Exchange Considerations

If you find a property you are eligible to buy, you will need a cost-effective way to send your down payment and closing costs to Canada. Exchange rates between USD and CAD can fluctuate significantly, affecting your final cost.

Using a specialized currency exchange service rather than a traditional bank can save thousands of dollars on large transfers. These services typically offer better exchange rates and lower fees than banks.

Tax Implications for American Buyers

Property Transfer Tax

Most Canadian provinces charge a property transfer tax (also called land transfer tax) when you buy real estate. Rates vary by province and are typically calculated as a percentage of the purchase price.

Foreign Buyer Taxes

In addition to the federal purchase ban, some provinces have implemented their own foreign buyer taxes:

• British Columbia: 20% foreign buyer tax on properties in certain areas
• Ontario: 25% Non-Resident Speculation Tax in the Greater Golden Horseshoe region

These provincial taxes apply even to exempt purchases, significantly increasing costs for foreign buyers.

Annual Property Taxes

All property owners in Canada must pay annual municipal property taxes. Rates vary by location but typically range from 0.5% to 2.5% of the property's assessed value.

Capital Gains Tax

If you sell your Canadian property for a profit, you'll owe capital gains tax in Canada. Non-residents are subject to withholding tax on the sale proceeds (typically 25%), though you can apply for a clearance certificate to potentially reduce this amount.

As a US citizen, you must also report the sale to the IRS and may owe US capital gains tax, though you can typically claim a foreign tax credit for Canadian taxes paid.

Ongoing Ownership Costs

Beyond the purchase price and taxes, budget for:

• Property insurance: Essential for protecting your investment
• Utilities: Electricity, gas, water, and heating costs
• Maintenance: Especially important if you're not living there year-round
• Property management: If you need someone to oversee the property remotely
• Condo fees: For condominiums or townhouses

Provincial Variations

Real estate rules and costs vary significantly by province. Popular provinces for American buyers include:

British Columbia

Known for Vancouver's mild climate and stunning scenery, but has the highest foreign buyer tax (20%) and some of Canada's most expensive real estate.

Ontario

Home to Toronto and Ottawa, with a 25% foreign buyer tax in the Greater Golden Horseshoe region. Still popular for its economic opportunities and proximity to the US border.

Quebec

No additional foreign buyer tax, making it more affordable. Montreal offers European charm at lower prices than Toronto or Vancouver, though French language skills are helpful.

Alberta

No provincial foreign buyer tax and generally more affordable real estate, particularly in Calgary and Edmonton. Popular for outdoor recreation and no provincial sales tax.

Legal Considerations

Title and Ownership

Canada has a well-developed land registry system. Your lawyer will conduct a title search to ensure the property has clear ownership and no liens or encumbrances.

Wills and Estate Planning

If you own property in Canada, consider creating a Canadian will specifically for that asset. This can simplify estate administration and potentially reduce probate costs for your heirs.

Should Americans Buy Property in Canada?

Buying property in Canada can make sense if you:

• Qualify for an exemption from the foreign buyer ban
• Want a recreational property in a rural area
• Plan to obtain permanent resident status
• Have family ties to Canada
• Can afford the additional foreign buyer taxes and costs

However, given current restrictions, high foreign buyer taxes in some provinces, and the complexity of cross-border ownership, many Americans may want to wait until the ban expires in 2027 or focus on properties that aren't subject to the restrictions.

For those considering international living, ExpatsList.org offers resources and community connections for expats worldwide.