Why Is Montreal a Top Destination for Foreign Real Estate Investment in 2026?
Updated: Sep 19
Montreal has spent years being compared to Toronto and Vancouver, usually as the more affordable alternative. That comparison undersells what's actually happening in the city right now. Montreal's commercial real estate market posted $2.9 billion in investment volume in the first quarter of 2026 alone, a 65% increase year-over-year, with the office sector recording an extraordinary 864% jump in transaction volume compared to the same period last year.
For foreign investors, though, understanding why Montreal is attracting capital matters less than understanding the legal rules that now govern how you can actually invest here. Canada's federal foreign buyer ban is still in effect, and it changes what's realistically available to non-Canadian buyers depending on whether you're looking at residential or commercial property.
Montreal is attracting record levels of real estate investment in 2026 due to its diversified economy, relative affordability, and immigration-driven demand. For foreign direct investment specifically, commercial real estate remains open to foreign buyers, subject to review under the Investment Canada Act above certain thresholds. Residential property purchases by non-Canadians are currently prohibited under federal law until at least January 1, 2027, with limited exceptions, and as of August 2026 no extension or replacement policy has been announced.
Key Takeaways
Montreal's commercial real estate market saw $2.9 billion in Q1 2026 investment volume, up 65% year-over-year.
Foreign investment in Canada through commercial real estate is open to non-Canadians, subject to Investment Canada Act thresholds; residential purchases by non-Canadians are banned until at least January 1, 2027.
As of August 2026, Ottawa has not announced whether the residential ban will be extended, repealed, or replaced.
Quebec charges no additional foreign buyer tax, unlike Ontario or British Columbia.
The federal Underused Housing Tax (UHT) has been repealed for 2025 and later years, though obligations from 2022–2024 still stand for non-residents who never filed.
What's Actually Driving Montreal's Real Estate Growth
Montreal's appeal isn't a single factor, it's a combination of economic and demographic forces that other major Canadian markets don't share to the same degree.
A diversified, resilient economy. Unlike cities historically tied to a single dominant industry, Montreal's economy is anchored across AI, aerospace, gaming, and healthcare. That diversification means the city is less exposed when any one sector slows down, which has helped property values hold up even during periods of broader economic uncertainty.
Relative affordability. Even as prices rise, Montreal remains meaningfully more affordable than Toronto or Vancouver, which continues to draw both individual and institutional capital, including foreign investments looking for value that's harder to find in those markets.
Immigration-driven demand. Population growth through immigration has kept pressure on housing demand even as some other economic indicators have softened, supporting rental markets and multi-family investment in particular.
Falling borrowing costs. The Bank of Canada cut its policy rate by 2.75 percentage points between mid-2024 and late 2025, settling at 2.25%, where it has since been held steady. Lower borrowing costs have made financing meaningfully cheaper than it was in 2023 and 2024, which is part of what's fueling the current wave of transaction activity.
Is Canada's Foreign Buyer Ban Still in Effect in 2026?
Yes. The federal ban on non-Canadians purchasing residential property is still active, and as of August 2026 there has been no formal announcement confirming an extension, repeal, or replacement ahead of its scheduled expiry.
Since 2023, Canada has restricted the purchase of residential property by non-Canadians under the Prohibition on the Purchase of Residential Property by Non-Canadians Act. This federal ban applies across the entire country, including Quebec and Montreal, and has been extended to at least January 1, 2027. Under the ban, non-Canadian individuals and most foreign-controlled corporations cannot purchase residential property, generally defined as buildings with three or fewer dwelling units, in most census metropolitan areas, which includes Montreal.
There are exceptions. Non-Canadians with certain work permits, refugee claimants, international students meeting specific criteria, and buyers acquiring property for residential development are among those who may still qualify. The rules are detailed and fact-specific, so confirming eligibility before making an offer is essential rather than optional.
Commercial real estate is a different story. The residential ban does not apply to commercial property. Foreign investors remain free to purchase office, retail, industrial, and other commercial real estate in Montreal, subject instead to review under the Investment Canada Act (ICA) if the transaction value exceeds the applicable threshold for their investor type. Given how much of Montreal's current investment growth is happening in office and industrial assets, this distinction opens real opportunities for foreign direct investment that residential rules currently close off.
What Happens If the Ban Expires on Schedule?
If the ban lapses as written on January 1, 2027, non-Canadians would once again be permitted to purchase residential property, subject to whatever provincial and municipal taxes apply at that time. It's worth noting that a lapse of the federal ban would not remove provincial or municipal foreign-buyer taxes elsewhere in Canada; those are separate laws. Quebec currently has no equivalent tax (see below), which is a distinct advantage regardless of how the federal ban plays out.
Foreign Direct Investment vs. Individual Foreign Investments: Two Different Rulebooks
"Foreign investment in Canada" isn't one single legal category, and conflating the two is one of the most common mistakes prospective buyers make.
Foreign direct investment (FDI) into commercial or institutional real estate, an office tower, an industrial portfolio, a retail development is generally permitted and is reviewed under the Investment Canada Act once a transaction crosses certain value thresholds. This is the category driving most of the capital behind Montreal's 2026 commercial growth.
Individual foreign investments in residential property are governed by an entirely different, and currently far more restrictive, framework: the federal residential buyer ban described above, plus any applicable provincial rules. A non-Canadian pension fund acquiring an office building and a non-Canadian individual trying to buy a Montreal condo are, legally speaking, operating under almost completely separate rules. Getting this distinction right early avoids a lot of wasted time later.
Quebec's Quiet Advantage: No Foreign Buyer Tax
This is a detail that surprises a lot of prospective investors, and it's one of Quebec's most underrated advantages over Ontario and British Columbia.
Ontario applies a Non-Resident Speculation Tax of up to 25% on residential purchases by non-Canadians in the Greater Golden Horseshoe region, which includes Toronto. British Columbia applies an Additional Property Transfer Tax of 20% in Metro Vancouver and other designated regions, on top of its separate speculation and vacancy tax. Quebec currently imposes no equivalent foreign buyer tax. Every buyer, resident or not, pays the same welcome tax (the province's land transfer duty) based on the property's purchase price, but non-Canadian buyers aren't charged an additional penalty simply for being foreign, the way they are in Canada's two other major markets.
That said, this doesn't mean non-resident purchases go unmonitored. Since 2020, Quebec has required buyers to disclose residency and citizenship information at the time of a property transfer for statistical purposes, and discussion of a future non-resident tax in Quebec resurfaces periodically as housing affordability remains a political issue. Investors should treat the current tax environment as favourable, not permanent.
A Federal Tax That Recently Disappeared: The Underused Housing Tax
Non-resident owners have one less annual filing to worry about in 2026. Bill C-15, which received royal assent in March 2026, repealed the federal Underused Housing Tax (UHT) for the 2025 tax year and beyond, meaning no UHT payment or return is required going forward. That repeal does not erase past exposure, however: obligations, penalties, and interest tied to the 2022 through 2024 tax years still apply to non-resident owners who owned qualifying property and never filed. If that describes your situation, that older exposure is worth resolving with a real estate lawyer or real estate attorney rather than assumed away.
Legal Considerations Before You Invest
Whether you're a foreign investor or a Canadian buyer from another province, a handful of legal steps consistently make the difference between a smooth transaction and a costly one.
Confirm which rules apply to you. Residency, citizenship, corporate structure, and the type of property all affect which federal and provincial rules govern your purchase.
Understand who closes the deal. In Quebec, real estate transactions are closed by a notary, not a lawyer, though a real estate lawyer, or real estate attorney, plays a distinct and valuable role reviewing your interests before you're contractually committed. Not all Montreal law firms handle foreign-investor files the same way, so experience with cross-border transactions matters when choosing one.
Review financing terms carefully. Non-resident buyers often face different lending requirements, so understanding your financing options early avoids delays once you're under contract.
Factor in the welcome tax. This land transfer duty is collected by the municipality shortly after closing and can reach several thousand dollars on higher-value properties, so it should be part of your budget from the start, not a late surprise.
Get ICA guidance for larger commercial deals. If you're pursuing foreign direct investment in commercial real estate above the applicable threshold, factor Investment Canada Act review timelines into your transaction schedule.
Use the right kind of lawyer for the property type. A residential real estate lawyer or residential real estate law firm is the right fit for a home or small residential building; commercial acquisitions and larger foreign investments call for counsel with specific commercial and cross-border experience.
Plan Your Montreal Real Estate Investment With Confidence
Montreal's growth story is real, but the legal framework around foreign investment has changed significantly since this conversation first started years ago. Whether you're evaluating a commercial acquisition tied to foreign direct investment or trying to understand what residential options remain available to you, getting accurate, current legal guidance before you commit capital protects your investment from day one.
David Ghavitian Avocat Inc. is a Montreal real estate lawyer and business lawyer Montreal practice, and one of the Montreal law firms helping foreign and domestic investors navigate acquisitions, financing, and compliance across residential and commercial real estate.
Considering a real estate investment in Montreal? Contact David Ghavitian Avocat Inc. Call 514-882-2920 to discuss your investment strategy with a real estate lawyer Montreal investors trust.
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Frequently Asked Questions
1. Can foreign nationals buy real estate in Montreal in 2026?
Foreign nationals can generally buy commercial real estate in Montreal, subject to Investment Canada Act review above certain thresholds. Residential property purchases by non-Canadians are currently prohibited under federal law until at least January 1, 2027, with specific exceptions for certain work permit holders, refugee claimants, international students, and buyers developing residential property.
2. Is Canada's foreign buyer ban still in effect right now?
Yes. As of August 2026, the ban remains in effect and is scheduled to expire January 1, 2027. The federal government has not yet announced whether it will extend, repeal, or replace the policy, so investors planning purchases near or after that date should watch for updates.
3. Does Quebec charge a foreign buyer tax like Ontario or BC?
No. As of 2026, Quebec does not impose an additional tax on non-resident or foreign buyers, unlike Ontario's Non-Resident Speculation Tax or British Columbia's Additional Property Transfer Tax. All buyers in Quebec pay the standard welcome tax based on the property's purchase price.
4. Why is Montreal attracting more real estate investment right now?
Montreal's commercial real estate market recorded $2.9 billion in investment volume in the first quarter of 2026, a 65% year-over-year increase, driven by a diversified economy across AI, aerospace, gaming, and healthcare, relative affordability compared to Toronto and Vancouver, and lower borrowing costs following Bank of Canada rate cuts.
5. Do I need a lawyer to invest in Montreal real estate as a foreign buyer?
While a notary legally closes the transaction in Quebec, working with a real estate lawyer Montreal investors rely on, or a real estate attorney Montreal companies use for cross-border matters, is strongly recommended before signing anything, particularly to confirm which residency and investment rules apply to your specific situation and to review financing and contract terms.
6. What's the difference between foreign direct investment and an individual foreign purchase?
Foreign direct investment generally refers to institutional or commercial capital, such as an acquisition of an office building, reviewed under the Investment Canada Act. An individual foreign investment in a home or small residential building falls under the separate federal residential buyer ban instead. The two are regulated differently, so the right legal approach depends on which category your purchase falls into.
7. Do I still owe the Underused Housing Tax as a non-resident owner?
Not for 2025 onward Bill C-15 repealed the UHT going forward. However, if you owned qualifying residential property between 2022 and 2024 as a non-resident and didn't file, that past obligation, along with any penalties or interest, still applies and hasn't been forgiven.
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