The Carney government is weighing a new framework as the 2027 deadline approaches, with Australia's tiered model firmly on the table
Canada's prohibition on foreign residential property purchases is set to expire on January 1, 2027 and the federal government is signalling it has no intention of simply extending it again.
According to a July 2026 analysis by Borden Ladner Gervais LLP (BLG), the Carney government is actively exploring a new post-ban framework — one that would channel offshore capital toward new construction and redevelopment rather than shutting it out entirely.
The Prohibition on the Purchase of Residential Property by Non-Canadians Act (the Act), in force since January 2023, bars foreign nationals and non-Canadian-controlled commercial enterprises from buying residential property in most urban centres across the country.
The ban was extended to January 1, 2027 in February 2024 following industry pressure and affordability concerns.
But the data behind the policy has long raised questions about its effectiveness. Real estate giant Royal LePage said in 2024 that the introduction of the ban had "virtually no impact" on housing prices in Canada.
The BLG report adds further context: foreign buyers represented just 1.1% of home sales in British Columbia in 2021, down from 3% in 2017, while average Canadian housing prices still rose more than 20% between 2021 and 2026.
Housing supply remains the more urgent problem. The Canada Mortgage and Housing Corporation (CMHC) continues to warn that Canada must roughly double its annual housing starts over the next decade to restore affordability to pre-pandemic levels, a target requiring between 430,000 and 480,000 units per year against a current rate of approximately 259,000.
The gap between what the ban set out to achieve and what it delivered has pushed Housing Minister Gregor Robertson to look abroad for alternatives. Robertson has indicated the government will review what has worked in similar countries, particularly Australia. Bloomberg
An Australian blueprint for Canada?
Australia's framework, which BLG describes as a model of active interest for Canada's post-2027 approach, restricts foreign purchases of established dwellings while carving out exceptions for new builds, large-scale redevelopment, and vacant land — investments that add to housing supply rather than competing for existing stock.
The model under consideration would see foreign buyers permitted to purchase new construction and vacant land, but remain barred from buying existing homes, with the idea of directing foreign capital towards adding to the housing supply rather than competing for existing stock.
Canada already has partial exemptions in this direction. Amendments introduced in 2023 created standing category-based exceptions for vacant land and certain redevelopment purchases, as well as for non-Canadian-controlled entities that are publicly traded in Canada.
The key distinction, as BLG notes, is that Australia expressly permits foreign purchases of new dwellings, while Canada's current exemptions stop short of that.
What brokers need to watch
Mortgage brokers operating in the residential market, particularly those working with developers and investors in major census metropolitan areas, have a direct stake in how this policy evolves.
The Act applies only within census metropolitan areas and census agglomerations, covering most urban markets but excluding rural and small-town Canada.
Under the current framework, industry professionals such as notaries, lawyers, mortgage brokers, and real estate agents may face potential liabilities when facilitating contraventions, emphasising the need for protective provisions in purchase contracts.
BLG's commercial real estate team, led by Parisa Gerami Hurst and Ali Poostizadeh, advises investors and developers to monitor legislative developments closely as the 2027 expiry approaches, particularly around supply-side exemptions that could reopen targeted residential market segments to foreign capital.
The firm expects the post-2027 framework to be shaped by property type and development intent rather than blanket eligibility.
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