Budget 2026 and the Foreign Buyer Ban: What It Means for Waterloo Region and Guelph
TLDR;
- The proposal would extend the ban on resale homes to January 1, 2029.
- It would exempt newly built homes, potentially allowing some non-Canadians to buy them.
- Ontario’s 25% Non-Resident Speculation Tax would still apply.
- The proposal is not in effect yet, and the existing rules still apply.
Budget 2026 includes a proposed change to the federal foreign buyer ban. If you’re buying or selling in Kitchener, Waterloo, Cambridge or Guelph, you may be wondering whether it could affect your plans.
The short version: resale homes would still be covered by the ban, while some non-Canadians could be able to buy newly built homes. But the proposal isn’t in effect yet.
What’s changing?
The federal ban, under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, started January 1, 2023 and was set to expire January 1, 2027.
Budget 2026, tabled November 5, 2026 by Finance Minister François-Philippe Champagne, proposes extending the ban on existing and resale homes for two more years, to January 1, 2029. It also proposes exempting newly built residential properties, so non-Canadians could buy new builds. The stated aim is to encourage investment in new housing while keeping existing homes for people living in Canada. Australia’s model was referenced.
This is still a proposal. Legislation and regulations need to be written, and the budget didn’t provide detailed eligibility rules or an effective date for the new-build exemption. For now, the existing rules still apply. Existing exemptions also remain, including for permanent residents and, under certain conditions, some work permit holders, students and refugees.
Budget 2026 includes about $45 billion in housing measures over 10 years, mostly through Build Canada Homes, and a goal of ending homelessness within a decade.
What could it mean for local buyers?
If you’re looking at a resale home, there’s little change proposed. The ban would continue to keep foreign buyers out of the resale market.
For new-build and pre-construction buyers, there could be some added demand if non-Canadians become eligible to buy. But Ontario’s separate 25% Non-Resident Speculation Tax (NRST) still applies province-wide, even when someone is exempt from the federal ban. A foreign buyer of a new build in Kitchener or Guelph would likely still face that 25% tax on top of the price. That’s a significant barrier, so any added demand may be modest.
Some critics, including an economist at the Canadian Centre for Policy Alternatives, say the exemption could hurt affordability for new builds. Historically, foreign buyers made up roughly 1-5% of purchases even in Toronto and Vancouver, and a much lower share elsewhere.
Here in Waterloo Region, the 2026 market has been balanced, with more inventory than in past years and prices softer than the pandemic peak. Condo developments in particular have faced delays, while many ground-oriented new builds proceed. The proposal may affect parts of the new-build market, but it’s too early to know how much.
What could it mean for local sellers?
For resale sellers, there’s no real change proposed. Competition from foreign buyers would remain off the resale market.
Builders and sellers of pre-construction assignments could see a slightly larger pool of potential buyers if the exemption takes effect. The size of that change is uncertain, and the NRST may limit its impact.
The rules may change as legislation and regulations are developed. Talk to a real estate lawyer about your specific situation. If you have questions about what this proposal could mean for your plans, feel free to reach out.
Check out this article next
