Ottawa has announced an exemption allowing foreign buyers to purchase new homes while maintaining restrictions on existing residential properties. As BNN Bloomberg reported on November 8, 2026, the change could support developers, but its effect on housing affordability—and whether foreign buyers will participate—remains uncertain.
What the new-home exemption changes
The federal government announced the exemption on Thursday, opening new homes to foreign purchasers following the residential purchase ban enacted in 2023. The exemption does not extend to existing residential properties. That ban, previously set to expire in the new year, has been extended until 2029.
The approach comes from Australia and is widely called the “Australian model” by policymakers. Its advocates argue that directing foreign capital towards newly built homes keeps it away from resale housing, protecting Canadian buyers from foreign competition in that market.
Supporters also say foreign purchases can help developers reach financing thresholds through pre-sales or sell completed projects. In their view, this can allow developers to move forward with additional projects and increase housing supply. That is the policy’s proposed mechanism, not confirmation that the exemption will produce more affordable homes.
Why the affordability outcome remains uncertain
The report presents a market with substantial unsold inventory. At the time of publication, there were thousands of unsold new condos in Toronto and Vancouver. According to RBC’s assessment cited in the report, condominium oversupply had driven prices down significantly, while detached homes were in a balanced market.
Whether foreign purchasers will buy those completed condos or pre-sale units remains unknown. Real estate professional Lucy Hua, whose foreign-buyer business dried up after the 2023 ban, expressed uncertainty about whether those buyers would return. She also argued that developers unable to sell projects cannot move ahead with future developments, limiting the new homes available to local residents.
Yinnon Geva, an assistant professor at the University of Toronto’s Institute for Management and Innovation, questioned the affordability rationale. He suggested the government was trying to keep the development industry operating and challenged whether supporting demand was consistent with bringing prices down.
For GTA buyers and investors, the distinction matters: supporting project sales and improving affordability are not necessarily the same outcome. The article offers competing views on that relationship rather than evidence that the exemption has already delivered results.
General due diligence for pre-construction buyers
The federal change also leaves provincial measures untouched. In the November 8 report, Hua said Ontario’s foreign buyer tax remained at 25 per cent, while a 20 per cent tax remained in certain British Columbia regions. The exemption should therefore not be read as removing every barrier facing foreign purchasers.
As general guidance, buyers considering a GTA pre-construction purchase should:
- Seek qualified advice about their eligibility and any taxes applicable to their circumstances.
- Review the purchase agreement carefully, including deposit timing and contractual obligations.
- Assess the specific project and their own budget rather than assuming the policy guarantees stronger sales or future price gains.
The announcement changes access to new homes, but it does not resolve the questions raised in the report. A measured approach means separating the exemption’s intended benefits from outcomes that remain unproven.
Contact Royale Realty Brokerage for Platinum VIP access to GTA pre-construction launches.