Buying a Home in the GTA as a Newcomer to Canada: The Real Rules

Last updated 7 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke. Updated September 2026 · Toronto and the GTA · 10 min read

Gate one: are you allowed to buy at all?

Canada’s Prohibition on the Purchase of Residential Property by Non-Canadians Act restricts purchases by people who are neither citizens nor permanent residents. It has been extended and it applies across the Greater Toronto Area.

The exemptions are what matter to newcomers. Broadly, the following can still buy:

• Permanent residents. Not caught at all.
• Work permit holders who meet the residency and tax-filing conditions in the regulations — in practice, having worked in Canada and filed Canadian income tax returns for a required number of the preceding years, with a permit that has meaningful time left on it.
• International students who meet a separate and stricter set of conditions, including tax filings, physical presence, a price cap on the property, and buying to live in it.
• Protected persons and refugee claimants under the relevant provisions.
• A non-Canadian buying jointly with a spouse or common-law partner who is a citizen or permanent resident.

Gate two: the 25% tax that catches people who cleared gate one

Ontario’s Non-Resident Speculation Tax is 25% of the purchase price, payable province-wide, on purchases by foreign nationals, foreign corporations and taxable trustees. On a $900,000 home that is $225,000, due on closing.

This is the one that blindsides newcomers, because being permitted to buy under the federal ban does not exempt you from the provincial tax. A work permit holder can be perfectly entitled to purchase and still owe NRST.

• Permanent residents are not foreign nationals and do not pay NRST.
• A rebate exists for buyers who become a permanent resident within a defined window after closing, provided the home is their principal residence and the application is made in time.
• Exemptions apply to nominees under the Ontario Immigrant Nominee Program, protected persons, and a foreign national buying with a spouse who is a citizen or permanent resident.

The down payment rules, which are the same for everyone

Canada’s minimum down payment is set by price, not by citizenship.

• Anything under 20% down requires mortgage default insurance, and the premium is added to your mortgage.
• On an $850,000 home that is $25,000 plus $35,000 — a $60,000 minimum down payment.
• Newcomer programs at the default insurers allow the standard minimum for permanent residents, and generally up to 90% financing for non-permanent residents on a work permit, with tighter conditions.

Purchase price	Minimum down payment
Up to $500,000	5%
$500,000 to $1,500,000	5% on the first $500,000, 10% on the rest
Over $1,500,000	20% of the full price

Credit: the invisible obstacle

A newcomer’s biggest practical problem is usually not money. It is that a Canadian lender cannot see a credit history, however strong the one you had at home.

You can borrow without a Canadian credit file — newcomer mortgage programs exist precisely for this — but the file makes everything cheaper and easier. Twelve months of Canadian history transforms your options.

• Open a secured credit card immediately on arrival. It reports like any other card and it is the fastest way to start a file.
• Keep utilisation under 30% of the limit and pay in full every month.
• Add a cell phone plan and a utility in your own name. They contribute.
• Do not apply for many products at once. Multiple hard inquiries in a short window work against you.
• Ask your bank for an international credit reference letter from your home country’s institution — some newcomer programs accept it in place of a Canadian bureau score.

The rebates newcomers most often miss

Two of these are genuinely worth thousands and are routinely left on the table.

• The land transfer tax refunds require you to be a Canadian citizen or permanent resident at the time of closing. A work permit holder buying today does not qualify, and there is no retroactive claim after you land PR.
• Buying in Toronto means paying both the provincial and the municipal land transfer tax. On a $900,000 purchase that is roughly $27,000 combined before any rebate — budget for it as a closing cost, not a surprise.
• You can contribute to an RRSP and withdraw it for a home purchase after the required holding period, which is a legitimate way for a newcomer with employment income to build a tax-advantaged down payment.

Rebate	Worth	Who qualifies
Ontario first-time buyer land transfer tax refund	Up to $4,000	Citizen or permanent resident, first-time buyer
Toronto first-time buyer land transfer tax rebate	Up to $4,475	Same, for purchases within the City of Toronto
Home Buyers’ Plan RRSP withdrawal	Up to $60,000 each	Anyone with RRSP room and a first-time buyer status
NRST rebate on becoming a PR	The full 25%	Paid NRST, then became a permanent resident within the allowed window

A realistic first-24-months plan

This is the sequence I walk newcomer clients through, and it works.

Months	What to do
0 – 3	Land. SIN, bank account, secured credit card. Rent, do not buy. Learn the city on the ground.
3 – 9	Build credit. Open an RRSP if you have employment income. Rent in the area you think you want — commutes look very different in February.
9 – 15	Talk to a mortgage broker for a real pre-approval, not an online estimate. Assemble the 90-day fund documentation. Confirm your eligibility under both the federal ban and NRST in writing.
15 – 24	Shop seriously. Make offers with a lawyer already retained and financing conditions in place.

Common questions

Can I buy a home in Toronto on a work permit?

Often yes. Work permit holders who meet the conditions in the federal regulations — broadly, having worked in Canada and filed Canadian tax returns for the required number of recent years, with sufficient time left on the permit — are exempt from the ban. But you may still owe Ontario’s 25% Non-Resident Speculation Tax, which is a separate question. Get both confirmed by a lawyer before you offer.

Do permanent residents pay the foreign buyer tax in Ontario?

No. Permanent residents are not foreign nationals for the purposes of the Non-Resident Speculation Tax, and they are not caught by the federal ban either. A PR buys on the same terms as a Canadian citizen.

What is the minimum down payment for a newcomer?

The same as for anyone else: 5% up to $500,000, 10% on the portion between $500,000 and $1.5 million, and 20% above $1.5 million. Newcomer programs at the default insurers make that minimum available to permanent residents, and generally allow up to 90% financing for non-permanent residents on a work permit.

Can I get a mortgage without a Canadian credit history?

Yes, through newcomer mortgage programs, which can accept an international credit reference, proof of employment and a larger down payment in place of a Canadian bureau score. You will usually get better pricing with twelve months of Canadian credit history, so it is worth starting that file on arrival.

Can I claim the first-time buyer land transfer tax refund on a work permit?

No. Both the Ontario refund and the Toronto rebate require you to be a Canadian citizen or permanent resident at the time of closing, and there is no retroactive claim once you obtain PR later.

Can I get the 25% speculation tax back if I become a permanent resident?

There is a rebate for buyers who become a permanent resident within the window set out in the legislation, where the home is their principal residence and the application is filed in time. The deadlines are strict, so diarise them on closing day.

Related reading

• What the foreign buyer ban actually catches
• Ontario’s Non-Resident Speculation Tax explained
• Minimum down payment in Ontario
• First-time home buyer programs in Ontario

General information for newcomers buying in Ontario, not legal, immigration, tax or mortgage advice. Eligibility under the federal purchase prohibition and the Non-Resident Speculation Tax depends on precise dates, permits and tax filings, and the rules have changed repeatedly. Confirm your own position in writing with a real estate lawyer and, where immigration status is involved, an immigration lawyer, before making an offer.