A French person wishing to acquire a residential property in Canada first encounters a federal legislative barrier: the Act prohibiting the purchase of residential properties by non-Canadians, which came into effect on January 1, 2023, has been extended until January 1, 2027. This law conditions the entire purchasing strategy based on the buyer’s immigration status.
Before looking for a broker or comparing mortgage rates, the first step is to determine whether federal law allows the transaction. Immigration status takes precedence over everything else.
Federal prohibition on purchases for non-Canadians: what the law says
The federal law targets individuals who are neither Canadian citizens nor permanent residents. A French citizen living in France, without a Canadian residence permit, cannot buy residential property in most urban areas of the country until January 1, 2027.
The text does not concern itself with tax status but exclusively with immigration status. A French citizen who has become a permanent resident or Canadian citizen can buy freely, even if living abroad and financing the purchase with French income. The distinction may seem subtle, but it changes the entire project setup.
Exceptions exist. Holders of a valid work permit can, under certain conditions, buy a house in Canada for a French citizen despite the general prohibition. Purchases of vacant land for development purposes, or properties located in rural areas, may also fall outside the scope of the law in certain cases.
Permanent residence and work permit: two pathways to property ownership
Permanent residence remains the safest route. It removes any restrictions related to federal law and opens access to provincial purchase assistance programs, standard mortgage rates, and guarantees from the Canada Mortgage and Housing Corporation (CMHC).
The work permit constitutes the other option. A holder of a valid work permit can buy residential property, but the financing conditions differ. Several Canadian banks require a higher down payment for non-permanent residents, and Canadian credit history plays a crucial role in obtaining the mortgage.
Building a Canadian credit history
Without a credit history in Canada, obtaining a mortgage under favorable conditions is a challenging endeavor. Most lenders require a score of at least 680.
A French citizen who has just arrived rarely has this score. The classic strategy is to open a Canadian bank account, obtain a credit card, and use it regularly for several months before applying for a loan. A minimum credit history of three months is generally required for the bank to consider the application.
Down payment and mortgage in Canada: the thresholds to know
The down payment (the equivalent of the personal contribution in France) varies according to the property’s price and the buyer’s status. For an eligible buyer, the CMHC sets specific thresholds.
- For a purchase price of CAD 500,000 or less, the minimum down payment is 5% of the price.
- For the range between CAD 500,000 and CAD 1,500,000, the minimum increases to 10% on the excess portion.
- Above CAD 1,500,000, the minimum down payment is 20%.
A non-permanent resident buyer, even if authorized to purchase, will often have to make a larger down payment, sometimes double the standard threshold. This banking requirement (and not legal) reflects the risk perceived by the lender.
According to the CMHC, monthly housing costs should not exceed 39% of the borrower’s gross monthly income. The total debt repayment amount (mortgage, credit cards, loans) should not exceed 44% of gross monthly income. These two ratios serve as the basis for any mortgage eligibility assessment.
Provincial taxes and hidden fees for a foreign buyer in Canada
Beyond the purchase price and mortgage, several layers of fees are added, some of which specifically affect foreign or non-resident buyers.
British Columbia and Ontario impose additional taxes on purchases made by non-residents. These amounts can represent a significant portion of the sale price, making these provinces considerably more expensive for a French citizen without permanent residence.
- Property transfer taxes (equivalent to notary fees in France) vary from province to province and are the responsibility of the buyer.
- Property inspection, optional but highly recommended, represents an additional cost to be anticipated before signing the purchase offer.
- Legal fees (lawyer or notary depending on the province) cover title verification, mortgage registration, and property transfer.
- Mortgage insurance, mandatory when the down payment is less than 20%, is added to the borrowed amount.
The role of the real estate broker
In Canada, the real estate broker represents the buyer or seller, and their commission is typically paid by the seller. For a French citizen unfamiliar with the local market, engaging a broker specialized in assisting foreign buyers helps avoid costly mistakes, particularly regarding the drafting of the purchase offer and conditional clauses (inspection, financing).
The Canadian real estate market operates differently from the French market in several ways: multiple offers are common in large cities, the time between the accepted offer and possession is shorter, and the sale agreement as known in France does not exist in the same form.
The real estate purchase project in Canada for a French citizen therefore relies first on clarifying immigration status, and then on building a financial file that meets local requirements. The extension of the federal prohibition until 2027 requires anticipating the project timeline well in advance, aligning immigration procedures and financial preparation.