Ottawa tabled Budget 2026 on November 5, 2026, and the housing chapter has real consequences for anyone buying, selling or investing in Ottawa and Eastern Ontario over the next two years. Some measures are already in effect. Many are only proposed and still need legislation or regulations before they apply.
We read the whole housing chapter so you don't have to. Below, we break down each change, tell you its status, explain what it means in plain language, and give you one practical next step. If you only read one section, make it the one on Ontario's HST relief for new homes: it carries the biggest dollar amount and a firm deadline.
The foreign buyer ban: extended to 2029, but new builds open up
Budget 2026 proposes to extend the ban on foreign purchases of existing residential properties by two years, from January 1, 2027 to January 1, 2029, while exempting newly built homes. The ban has been in force since January 1, 2023. Canadian citizens and permanent residents are not affected.
What this means: Resale homes stay largely off limits to most non Canadians. Opening new builds could bring foreign demand back to presale and builder inventory, which matters for builders and for anyone selling a new home or a presale assignment. The budget says legislation and a regulatory process will follow "in short order," but it has not published the exemption's detailed rules or start date.
Your next step: Selling a new build or assigning a presale? Your buyer pool may grow. Talk to us about positioning and timing once the rules are final.
What changes for your mortgage
Four budget measures touch the mortgage itself, plus one big rate move that landed the week before.
Optional mortgage insurance up to $1.5M
Some buyers can choose to insure their mortgage to access better rates. Today that option generally applies to homes under $1M with a 25 year amortization. The proposal raises the limit to $1.5M and allows 30 year payments for first time buyers and new homes. In Ottawa, that brings a much larger share of family homes into range, with a lower monthly payment. The budget does not yet spell out full eligibility rules.
Your next step: Shopping between $1M and $1.5M? Ask your lender whether you would qualify once this takes effect, and how it changes your rate.
Easier rate comparison
It is hard to know whether the rate you are offered is competitive. Public data from the Bank of Canada would give you a benchmark and push lenders to compete. A small difference in rate adds up to thousands of dollars over a mortgage.
Your next step: Don't wait for the data. Get at least three quotes, from a bank, a mortgage broker and a credit union, before you commit.
Clearer prepayment penalties
Breaking a fixed mortgage early, to sell, move or refinance, can cost thousands, and the calculation is hard to check. Ottawa intends to consult on making these penalties clearer. No rule has been proposed yet.
Your next step: Thinking of selling before your term ends? Ask your lender for a written penalty estimate first, and we will build it into your net proceeds.
Faster approvals through the CRA
The budget proposes amending the Canada Revenue Agency Act so lenders and insurers can confirm your income directly with the CRA. The goal is faster applications and less mortgage fraud. Industry would fund the service after the pilot.
Your next step: Self employed or paid on commission? Keep your Notices of Assessment current. Clean tax filings will matter even more.
Also this week: the Bank of Canada raised rates
This one is not in the budget, but it may matter more to your payment. About a week before the budget, the Bank of Canada raised its policy rate to 2.5%, its first increase since July 2023. Variable rate mortgages and lines of credit usually move with prime. Fixed rates follow the bond market rather than the policy rate directly.
Your next step: Renewing in the next 12 months or holding a pre approval? Call your lender or broker now to review fixed versus variable and your rate hold. You can also run your numbers on our mortgage calculator.
For investors and builders: the missing middle gets easier to finance
Ottawa wants more "missing middle" housing: buildings bigger than a house but smaller than a tower. Budget 2026 goes after the main barrier, which is financing.
New 3 and 4 unit builds
The budget proposes insured construction financing for newly built triplexes and fourplexes from any mortgage insurer:
Up to 90% of the property's value
No maximum property value
No requirement to live in one of the units
If the owner keeps the building as a rental, an insured mortgage amortized over up to 30 years
The budget's own example makes the point. A $3 million fourplex does not qualify for insured financing today: it is over the $1.5 million cap, and the owner would have to live in a unit. Under the proposal, a builder could finance it, then keep it and rent all four units, or sell them individually.
Your next step: Own a lot in Ottawa that could take three or four units? Send us the address. We will look at what it could hold and what it could be worth once built.
5 to 50 unit buildings: more insurers from February 1, 2027
Insured financing on small apartment buildings has come only from CMHC. Starting February 1, 2027, the two private mortgage insurers, Sagen and Canada Guaranty, will be able to insure residential properties of five to fifty units. New insurance flexibilities for three and four unit homes start the same day. This delivers a commitment from the Spring Economic Update 2026, with detailed terms in a Finance Canada technical backgrounder.
What this means: More options, more competition and potentially faster approvals for buyers of six plexes up to 50 unit buildings. More financeable buyers also supports values when owners sell.
Your next step: Own or want a small apartment building? Speak with a commercial mortgage broker about the new options before February, and see our investor resources and MLI Select guide.
Faster permits and modern construction
$100 million over three years from 2027 to 2028 for digital permitting and AI with municipalities. In Edmonton, automated reviews cut approval times from two weeks to one day.
$300 million over three years from 2028 to 2029 to adopt modern construction methods such as modular.
$67.7 million over four years from 2027 to 2028 to modernize housing data and speed up national building code updates.
Your next step: Planning an addition, a secondary suite or an infill project? Start your permit file early. Faster systems are coming, but not overnight.
Build Canada Homes: $13 billion more
The federal housing agency gets $13 billion in new capital over ten years starting 2028 to 2029, bringing its total to $45 billion. Its targets are 200,000 new homes over the next decade and tripling non market housing starts to 24,000 a year. Ottawa also proposes $1.5 billion over four years to service underused federal land with roads, water and wastewater. These are targets, not completed homes.
Your next step: Watch for federal land projects announced in Ottawa. New supply nearby can affect rents and resale competition.
Buying new in Ottawa? Up to $130,000 in HST relief, with a deadline
This is the biggest number for Ottawa buyers right now, and it comes from a federal and Ontario partnership the budget builds on. New homes in Ontario normally carry 13% HST. Eligible buyers of new homes valued up to $1 million can have the full HST relieved, up to $130,000. Higher priced new homes get partial relief, and homes above $1.85 million keep the existing $24,000 rebate.
What this means: Sign on April 1, 2027 instead of March 31, 2027 and the same home could cost tens of thousands more. If a new build is in your plans for the next year, the time to shop is now, not next spring. The relief is subject to federal regulations and eligibility conditions.
Your next step: Ask every builder whether their price is before or after HST relief, and have your real estate lawyer confirm eligibility before you sign. Try our new home HST rebate calculator to estimate your savings.
First time buyers: use every tool already in place
The budget leaves the main first time buyer programs in place and funds the CRA to keep administering the First Home Savings Account.
Couples can each use both the FHSA and the Home Buyers' Plan. Buying new adds GST relief on top.
Your next step: Not buying for a year or two? Open an FHSA now. Contribution room only starts building once the account is open.
Heat pump rebates: lower bills, stronger resale
The National Heat Pump Rebate, announced October 8, 2026, puts more than $2 billion over eight years toward helping up to 820,000 households switch to cold climate heat pumps. Lower income households get enhanced support, and approvals are promised within 24 hours. Households switching from oil, propane or electric resistance heating save more than $1,400 a year on average, according to the budget.
What this means: This is especially relevant in rural Eastern Ontario, where oil and propane heat are common. Lower running costs also make a home more attractive to buyers.
Your next step: Selling in 2027 with oil or propane heat? Switching first could lower your costs and widen your buyer pool. Ask us whether it makes sense for your home.
The four dates to know
Our take
Budgets announce billions and big targets, but targets are not homes and funding is not a shovel in the ground. What matters for your move is what is in force today and what actually gets built near you.
If you are buying new, the March 31, 2027 HST deadline is the biggest money on the table. If you invest, watch the February 1, 2027 financing changes for multiplexes and small apartment buildings. And if you are waiting on a proposal before you act, remember that proposals can take months to pass, change along the way, or never arrive.
Not sure which of these changes apply to you? Our team works with buyers, sellers and investors across Ottawa and Eastern Ontario, in English, French and Arabic. Reach out at 613 864 3327 or charleskhouri@royallepage.ca, and we will map out exactly what Budget 2026 means for your plans.
Frequently asked questions
Is the foreign buyer ban being lifted in 2027? No. Budget 2026 proposes to extend it on existing homes to January 1, 2029. Newly built homes would be exempt once legislation and regulations are in place.
Can I get a $1.5 million insured mortgage now? The high ratio insured mortgage limit is already $1.5 million. The budget proposes raising the limit for optional mortgage insurance from $1 million to $1.5 million, with 30 year amortization for first time buyers and new homes. That part is not in effect yet.
Do I have to be a first time buyer to get the Ontario HST relief? No. The temporary relief applies to eligible buyers of new homes, not only first time buyers, for agreements signed between April 1, 2026 and March 31, 2027. The home must be used as a primary residence or a residential rental. Confirm eligibility with your lawyer.
Do the new multiplex financing rules apply to existing buildings? The proposed 90% insured construction financing applies to newly built three and four unit homes. Private insurers covering five to fifty unit buildings starts February 1, 2027; the detailed terms are in a Finance Canada technical backgrounder.
Did the budget raise interest rates? No. The Bank of Canada sets its policy rate independently. It raised the rate to 2.5% about a week before the budget, its first increase since July 2023.
Sources
Budget 2026, Chapter 3: A more affordable life, Government of Canada
Budget 2026: Key Measures, Department of Finance Canada
Expanding Ontario's HST Rebates for New Homes, Ontario Ministry of Finance, March 2026
Federal budget relaxes foreign buyer ban, includes billions for housing, Canadian Mortgage Trends
Will the Nov. 5 federal budget make life cheaper for Canadians?, Money.ca
This article is for general information only and is not legal, tax, lending or financial advice. Proposed measures may change before they take effect, and each program has its own eligibility rules. Confirm details with your lawyer, lender, accountant or financial advisor.
Charles Khouri, Sales Representative, The Khouri Group, Royal LePage Team Realty, Independently Owned and Operated, Brokerage. 1723 Carling Avenue, Suite 1, Ottawa.
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