Non-Resident Residential Real Estate Investment: Alberta vs Ontario

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For non-residents investing in Canada, contact our law firm at Chris@NeufeldLegal.com - 403-400-4092 / 905-616-8864

For non-resident investors, choosing between Alberta and Ontario involves navigating two vastly different regulatory and fiscal environments. While Ontario has historically been the primary target for international capital due to its global stature, Alberta has emerged as a high-growth alternative with significantly fewer barriers to entry (constraints currently remain in place until January 1, 2027, under the the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, which currently creates an added layer of legal navigation as between exempt and non-exempt localities and property types (more on the Prohibition)).

The most striking difference lies in the upfront tax burden. Ontario imposes a 25% Non-Resident Speculation Tax on residential property purchases by foreign nationals and foreign-controlled corporations across the entire province. In contrast, Alberta has no provincial foreign buyer tax or speculation tax, allowing non-residents to purchase property at the same price as resident Albertans. This means an investor buying a $1,000,000 home in Ontario must pay an additional $250,000 at closing, whereas the same purchase in Alberta would incur $0 in provincial speculation tax.

Closing costs in Ontario are significantly higher due to the Land Transfer Tax (LTT), which is calculated on a sliding scale up to 2.5% for high-value homes. In the City of Toronto, investors face a "double hit" with an additional municipal land transfer tax that effectively doubles the cost. Alberta does not charge a land transfer tax; instead, it uses a modest registration fee system. For a $500,000 property, an Alberta investor might pay roughly $550 in registration fees, while an Ontario investor could pay over $6,000, or $12,000 if the property is in Toronto.

Landlord-tenant legislation creates a major divide in ongoing cash flow management. Ontario has strict rent control for most units built before November 15, 2018, limiting annual increases to a government-set guideline (often around 2.5%). Alberta has no rent caps, allowing landlords to increase rent to market rates once per year, provided they give proper notice. This flexibility in Alberta allows investors to adjust more quickly to inflation and rising interest rates compared to the highly regulated Ontario market.

Alberta’s legal framework is generally considered more "landlord-friendly" regarding lease terminations and deposits. In Alberta, a fixed-term lease automatically ends on the expiration date unless a new agreement is signed, and landlords can collect a security deposit of up to one month's rent. Ontario leases automatically transition to month-to-month tenancies, making it much harder to regain possession of a unit. Furthermore, Ontario prohibits security deposits (allowing only a last month's rent deposit), which leaves investors with less protection against property damage.

The "barrier to entry" is much lower in Alberta, where average home prices in major hubs like Calgary and Edmonton remain significantly more affordable than in the Greater Toronto Area. While a detached home in the GTA often exceeds $1.2 million, comparable properties in Calgary frequently hover around the $600,000 to $700,000 range. This price gap allows non-resident investors to acquire multiple properties in Alberta for the cost of a single unit in Ontario. This geographic diversification can help mitigate the risk of a localized market downturn.

Ongoing operational costs are influenced by the provincial sales tax structures. Ontario utilizes a 13% Harmonized Sales Tax (HST), which applies to many professional services, property management fees, and utility costs. Alberta does not have a provincial sales tax, charging only the 5% federal GST. For a non-resident managing a property from afar, these savings on maintenance, repairs, and management fees can add up to a noticeable difference in the annual "cap rate" or net return on investment.

Finally, the two provinces offer different economic risk profiles. Ontario’s economy is highly diversified, anchored by finance, technology, and manufacturing, which often leads to steadier, long-term appreciation in the GTA. Alberta’s market is more cyclical, historically tied to the energy sector, though it has seen rapid diversification into tech and renewables recently. While Ontario offers the security of a global tier-one city, Alberta currently offers a "catch-up" growth opportunity fueled by massive inter-provincial migration from residents fleeing Ontario's high cost of living.

For knowledgeable and experienced tax, investment and corporate law representation for non-residents looking to invest in Canada, whether through active business enterprises, passive income investments or real estate investments, we welcome you to contact our law firm for strategic legal advice to optimize your commercial interests in Canada at Chris@NeufeldLegal.com or call 403-400-4092 / 905-616-8864.

Comparative Residential Real Estate Investment - Alberta vs. Ontario (2026)

Feature	Alberta (e.g., Calgary, Edmonton)	Ontario (e.g., Toronto, Ottawa)
Foreign Buyer Tax	0% (no provincial tax)	25% non-resident speculation tax (NRST)
Municipal Foreign Tax	0%	10% (Toronto only, adds to the 25%)
Land Transfer Tax	None (registration fee system only)	0.5% - 2.5%
City Transfer Tax	None	Up to 7.5% (Toronto Municipal LTT)
Rent Control	No Cap (market rates apply annually)	2.1% Cap for 2026 (for units built before Nov. 2018)
Sales Tax (PST/HST)	5% GST only	13% HST (impacts service & management costs)
Typical Security Deposit	One Month's Rent (standard practice)	Last Month's Rent Only (no damage deposits)
Lease Expiry	Fixed-Term Ends Automatically	Automatically Shifts to Month-to-Month

Real Estate Investment Comparatives of key Canadian provinces - Residential Real Estate: Alberta vs Ontario, Alberta vs British Columbia; Commercial Real Estate: Alberta vs Ontario, Alberta vs British Columbia.

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