Buying a home is one of the most significant financial and legal decisions a person can make, especially for newcomers who are unfamiliar with the Canadian housing market. Ontario, home to cities like Toronto, Ottawa, and Mississauga, has one of the most active real estate markets in Canada. But beyond budget, buyers, especially immigrants and temporary residents, need to understand the legal framework, procedural steps, taxes, and restrictions that may apply to them.
This blog will provide you with a step-by-step guide on how this process is done, what taxes and fees are included, and what you must consider as a temporary resident.
Step-by-Step Process for Buying Property in Ontario
Purchasing property in Canada follows a multi-stage legal and financial process. Understanding the order of these steps is essential.
1. Determine Your Budget and Get Pre-Approved for a Mortgage
Calculate your total budget, taking into account the down payment (typically 5%), land transfer taxes, legal fees, inspection costs, and monthly mortgage payments.
Then, secure a mortgage pre-approval from a bank or financial institution to establish your financing limits.
2. Hire a Licensed Real Estate Agent
Agents licensed by the Real Estate Council of Ontario (RECO) can help you search, evaluate pricing, and negotiate effectively.
3. View Properties and Submit an Offer
Once you find the right property, your agent will help you prepare a formal Offer to Purchase, which outlines the proposed price, conditions (like financing or inspection), and closing date.
4. Legal Review by a Real Estate Lawyer
Once the seller accepts the offer, your lawyer will review the title, verify legal documents, and coordinate the financial and legal closing.
5. Pay the Deposit
A deposit (typically 3 – 5%) is paid into a trust account upon acceptance of the offer. This is different from the down payment paid on closing day.
6. Property Inspection and Appraisal
A home inspection and lender-required appraisal are typically conducted before the transaction is finalized.
7. Final Closing and Transfer of Ownership
On the closing day, your lawyer finalizes the legal transfer. You’ll be responsible for paying remaining funds, legal fees, and land transfer taxes before receiving the keys.
Can Newcomers or Non-Residents Buy Property in Ontario?
Yes, but there are restrictions.
Under the Prohibition on the Purchase of Residential Property by Non-Canadians Act, most non-residents, including those on temporary visas, cannot buy residential property in Canada until the end of 2026, unless they qualify under specific exemptions.
Key Exemptions from the Ban
You may still be eligible to purchase property if you fall under one of the following categories:
- Permanent residents or Canadian citizens
- Temporary foreign workers with a valid work permit and 183+ days of presence in Canada over the past 12 months
- International students who meet specific criteria (such as having filed taxes and being enrolled long-term)
- Property located in areas outside of designated census metropolitan zones as outlined in the Act
Some rural or remote properties may be exempt from the foreign buyer ban even for temporary residents. In this case, we highly recommend you consider the chance of buying a property in rural sections.
Major Taxes and Fees to Consider
A. Land Transfer Tax (LTT)
This is a provincial tax payable on the purchase price of the property. It applies to all buyers, regardless of residency status.
| Purchase Price | Ontario LTT Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,001–$250,000 | 1.0% |
| $250,001–$400,000 | 1.5% |
| $400,001–$2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Toronto buyers must pay an additional municipal land transfer tax, effectively doubling the LTT.
First-Time Home Buyer Rebate
Permanent residents and citizens may be eligible for a rebate of up to $4,000. However, newcomers who do not yet hold PR status are not eligible.
B. Non-Resident Speculation Tax (NRST)
Temporary residents and non-permanent residents must also pay an additional 25% NRST on residential property purchases in Ontario.
You may be eligible for a refund of the NRST if you meet one of these criteria within four years:
- You become a permanent resident
- You graduate from a designated program at a Canadian post-secondary institution
- You hold a valid work permit and are employed full-time in Ontario
NRST applies even if one spouse is a non-resident, unless both buyers qualify for an exemption.
Important Considerations for Temporary Residents and Immigrants
- Mortgage Access May Be Limited: Many Canadian lenders have stricter requirements for temporary residents or applicants without Canadian credit history.
- Larger Down Payments May Be Required: Non-residents are often asked to provide at least 35% down, and may not qualify for insured mortgages.
- Legal Advice Is Essential: A real estate lawyer can help interpret applicable laws, identify risks, and ensure compliance with federal restrictions.
- Joint Ownership With a Citizen or PR: Purchasing jointly with a Canadian citizen or permanent resident may ease restrictions but won’t eliminate NRST liability if one buyer is a non-resident.
It is also important to note that some developers may also have specific policies about foreign buyers in pre-construction projects, so always ask before signing.
Conclusion
Buying property in Ontario is a major step toward establishing your life in Canada, but for immigrants and temporary residents, the process is filled with extra layers of regulation, taxes, and legal requirements. From land transfer taxes to the NRST, to the federal restrictions on non-residents, it’s essential to plan ahead and consult with legal professionals. With the right guidance, even newcomers can confidently navigate the road to home ownership in Ontario.
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