Investing in Montreal Real Estate for Foreigners: 2026 Guide & Regulations

 Real estate investment for foreigners in Montreal in 2026 is shaped by significant legal and economic shifts, most notably the extension of federal restrictions alongside strategic investment opportunities.

1. Legal Status: Can Foreigners Buy?

• Foreign Ownership Ban: The "Prohibition on the Purchase of Residential Property by Non-Canadians Act" has been officially extended until January 1, 2027. This prevents non-Canadians from purchasing residential properties (3 units or less) in major urban areas like Montreal.

• Available Exceptions:

• Non-Residential Properties: Foreigners can still purchase commercial real estate or large residential buildings (more than 3 units).

• Rural Areas: Properties outside the "Montreal Metropolitan Area" (e.g., mountain cabins or farms) are often exempt.

• Work Permit Holders & Students: Strict exceptions exist for valid work permit holders or international students who meet specific residency and tax criteria.

•  2. Taxes and Fees for 2026

• Withholding Tax: Upon sale, the buyer must withhold 25% of the total sale price for the CRA until a tax clearance certificate is issued.

Underused Housing Tax (UHT): A 1% annual tax applies to the value of foreign-owned residential properties if they are vacant or underutilized.

Capital Gains Changes: As of 2026, the capital gains inclusion rate may increase to two-thirds (2/3) for gains exceeding a certain threshold.

3. Montreal Market Outlook 2026

Price Growth: Experts predict moderate growth between 1% and 5% during 2026.

Rental Market: Demand remains very strong. Investing in "Plexes" is an attractive option for stable returns, despite financing costs.

Promising Areas: Neighborhoods like Verdun and Le Sud-Ouest are rising stars due to urban development, while Plateau and Rosemont remain stable classics.

4. Tips for Foreign Investors

Legal Consultation: Always verify the property category via CMHC mapping tools to ensure it is not subject to the ban.

Financing: Canadian banks typically require a down payment of at least 35% from foreign buyers, with strict source-of-funds auditing.