Dubai and Toronto sit at opposite ends of how a city treats a foreign buyer's money. Dubai built its case around a single flat fee, freehold ownership open to any nationality, and zero ongoing taxation. Canada has spent the last three years doing close to the reverse: a federal ban on most non-Canadian purchases, a 25% provincial speculation tax for buyers still allowed in, and, since 2025, a Toronto-specific speculation tax on top of that. Below is a line-by-line comparison of access, cost, tax, and yield in both cities for 2026.
Who can even buy: an open door versus a federal ban
Dubai imposes no nationality restriction on ownership within its designated freehold areas, where most investment-grade stock sits, and a foreign buyer pays the same 4% registration fee as a UAE national (DLD).
Canada runs the opposite policy. The Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force on January 1, 2023, and on February 4, 2024 the government extended it two more years, moving the expiry to January 1, 2027 (CMHC). It remains in force today, with no repeal recorded on the consolidated federal statute (Justice Laws Website). Its main exceptions cover temporary residents meeting study or work permit conditions, protected persons and refugee claimants, accredited diplomats, a non-Canadian buying jointly with an eligible Canadian citizen or permanent resident spouse, Indigenous peoples exercising constitutional rights, and property outside a census metropolitan area or agglomeration, which excludes most of Toronto itself (CMHC).
The two regimes in one table
| Cost or rule | Dubai | Toronto / Canada |
|---|---|---|
| Foreign buyer access | Open, no nationality restriction in freehold areas | Federal ban on most non-Canadian purchases, extended to January 1, 2027 (CMHC) |
| Registration or transfer cost | 4% of sale value, paid in practice by the buyer (DLD) | Provincial plus municipal land transfer tax (Toronto mirrors Ontario's brackets), roughly 3-3.6% combined (Ontario, Toronto) |
| Extra tax on foreign buyers | None | NRST 25% (since Oct 25, 2022) plus Toronto's MNRST 10% (since Jan 1, 2025), stacking to 35% of price (Ontario, Toronto) |
| Annual property tax | None | 0.767311% of assessed value in 2026, combining city, education, and City Building Fund rates (Toronto) |
| Capital gains tax on sale | None | Half the gain is added to taxable income at graduated federal and Ontario rates; a 2024 plan to raise the inclusion rate to two-thirds was cancelled in March 2025 (Reuters) |
| Tax on rental income, non-resident owner | None | 25% withholding on gross rent under s.212(1)(d), unless a s.216 election shifts the owner to net income at graduated rates |
| Price benchmark, 2026 | Marina AED 19,360/sqm (~USD 5,272 at the 3.6725 peg), Downtown AED 26,323/sqm (~USD 7,168), Palm AED 28,702/sqm (~USD 7,815) (DLD) | Toronto average resale price CAD 1,081,375, condo average CAD 665,760, June 2026 (TRREB) |
| Gross rental yield | Prime 5.4-6.3%, affordable 7-9% (DLD) | ~3.7%, calculated from TRREB price and CMHC rent, before tax (TRREB, CMHC) |
Buying in: a flat 4% against a stacked, restricted entry
Dubai's entry cost is one line item. The Dubai Land Department charges 4% of the sale value, and while the rule does not legally assign the cost to either party, market convention has the buyer settling it in practice (DLD). There is no separate transfer duty, no stamp tax, and no speculation surcharge for a foreign passport.
Toronto stacks several layers before standard closing costs. Ontario's land transfer tax runs 0.5% on the first CAD 55,000 up to 2.0% above CAD 400,000 (Ontario). Toronto is the only Ontario municipality that layers its own Municipal Land Transfer Tax on top, mirroring those brackets to CAD 2 million and then turning steeply progressive, reaching 8.60% above CAD 20 million from April 1, 2026 (City of Toronto). On Toronto's average resale price of CAD 1,081,375, that doubling works out to roughly 3.3% combined, before any first-time buyer rebate. For the narrow set of non-Canadians the ban still allows to buy, Ontario's 25% NRST and Toronto's own 10% MNRST apply on top, adding 35% of price in speculation tax alone, with no grandfathering before the municipal tax took effect January 1, 2025 (City of Toronto).
Owning it: nothing recurring in Dubai, a rising municipal bill in Toronto
Dubai ownership carries no annual property tax at all. Toronto ownership carries one every year, and 2026's combined residential rate is 0.767311% of assessed value, split between a 0.605295% city rate, a 0.153000% education rate, and a 0.009016% City Building Fund levy (City of Toronto). On Toronto's average home value, that is roughly CAD 8,300 a year, a recurring cost with no equivalent in Dubai.
Selling: zero capital gains tax against a rate that survived a repeal attempt
A Dubai sale carries no capital gains tax, full stop. A Canadian sale includes one-half of the gain in the seller's taxable income, taxed at whatever marginal federal and Ontario rate applies. That inclusion rate has recent history: Budget 2024 proposed raising it to two-thirds on gains above CAD 250,150 for individuals, the government deferred the effective date to January 1, 2026, and in March 2025 Prime Minister Mark Carney's government confirmed it would not proceed at all, so one-half remains the rate for 2026 (Reuters). Non-resident sellers also go through a separate withholding and clearance-certificate process under the Income Tax Act before proceeds can be released, a step a Dubai seller never encounters.
Renting it out: yield without tax versus a lower yield with two layers of tax
Dubai's gross yields, 5.4-6.3% in prime areas and 7-9% in affordable segments per DLD data, are also net of income tax, since rental income is not taxed at all (DLD). Toronto starts lower before any tax applies. TRREB's June 2026 Market Watch put Toronto's average condo apartment price at CAD 665,760, down 9.0% year on year, while CMHC's 2025 Rental Market Report measured average GTA two-bedroom purpose-built rent at CAD 2,034 a month, vacancy 3.0% (TRREB, CMHC). Annualizing that rent against the condo price gives a gross yield near 3.7%, calculated from those two sources rather than published as one index. Tax then cuts further: a non-resident owner owes 25% withholding on gross rent under section 212(1)(d) of the Income Tax Act, unless a section 216 election shifts them to net taxation at graduated rates (Justice Laws), and a Canadian resident adds net rent to ordinary income at marginal rates.
So which one wins
On access alone, Dubai wins outright: open to any buyer, at the same 4% fee, with no annual tax, no capital gains tax, and no tax on rental income. Toronto is not competing on that basis in 2026. Its own federal government has spent three years making entry harder for outsiders, through a purchase ban running to January 1, 2027, a 25% provincial speculation tax, and, since 2025, its own additional 10% municipal version. What Toronto still offers is a mature, English-speaking G7 housing market with rule of law, a currency outside the dollar peg, and institutional depth a fifteen-year-old freehold market cannot match yet. For an investor optimizing purely for yield and simplicity, Dubai is the more direct route. For one seeking currency diversification who can actually clear Canada's ownership restrictions, Toronto remains a different kind of asset, just a considerably more expensive and heavily taxed one to hold.
FAQ
Can a foreign investor legally buy property in Toronto in 2026? Only within specific exceptions. The federal ban runs to January 1, 2027, and its main carve-outs cover certain temporary residents on study or work permits, protected persons, diplomats, a non-Canadian buying jointly with an eligible Canadian or permanent resident spouse, and property outside a census metropolitan area, which excludes most of Toronto (CMHC).
If the federal ban lapses in 2027, does that mean foreign buyers pay no extra tax? No. Even a buyer who clears the federal ban still owes Ontario's 25% Non-Resident Speculation Tax plus, in Toronto specifically, an additional 10% Municipal Non-Resident Speculation Tax, 35% of the purchase price in speculation tax alone, separate from the ban itself (Ontario, Toronto).
Is Dubai's 4% DLD fee really the only government cost of buying? It is the only mandatory transfer cost. Buyers typically also budget for agency commission and small trustee and title fees, but there is no stamp duty, no land transfer tax, and no foreign buyer surcharge on top, unlike in Ontario (DLD).
Did Canada actually raise capital gains tax on real estate in 2025? No, the opposite happened. Budget 2024 proposed raising the inclusion rate from one-half to two-thirds on larger gains, but after a deferral the government confirmed in March 2025 it would not proceed, so sellers in 2026 are still taxed on only half the gain (Reuters).
Why is Toronto's rental yield so much lower than Dubai's? Mainly price. TRREB's average Toronto condo price of CAD 665,760 is high relative to CMHC's average two-bedroom rent of CAD 2,034 a month, producing a gross yield near 3.7% before tax, against Dubai's DLD-tracked 5.4-9% range, which is also free of income tax on the rent itself (TRREB, CMHC, DLD).
Sources
- Dubai Land Department, Property Sale Registration (4% registration fee): https://dubailand.gov.ae/en/eservices/property-sale-registration/
- Dubai Land Department, Open Data, Real Estate Data (prime prices and yields): https://dubailand.gov.ae/en/open-data/real-estate-data/
- CMHC, Prohibition on the Purchase of Residential Property by Non-Canadians Act (status, extension to January 1, 2027, exceptions): https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/consultations/prohibition-purchase-residential-property-non-canadians-act
- Justice Laws Website, Prohibition on the Purchase of Residential Property by Non-Canadians Act, consolidated text: https://laws-lois.justice.gc.ca/eng/acts/P-25.2/FullText.html
- Government of Ontario, Non-Resident Speculation Tax (25% rate): https://www.ontario.ca/document/land-transfer-tax/non-resident-speculation-tax
- Government of Ontario, Calculating Land Transfer Tax (bracket rates): https://www.ontario.ca/document/land-transfer-tax/calculating-land-transfer-tax
- City of Toronto, Municipal Land Transfer Tax rates and fees (including graduated high-value brackets effective April 1, 2026): https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/municipal-land-transfer-tax-mltt-rates-and-fees/
- City of Toronto, Municipal Non-Resident Speculation Tax (10% rate, effective January 1, 2025): https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/municipal-land-transfer-tax-mltt-information/
- City of Toronto, Property Tax Rates and Fees, 2026: https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-rates-fees/
- Toronto Regional Real Estate Board, Market Watch, June 2026: https://www.trreb.ca/market-data/market-watch/
- CMHC, Rental Market Reports for Major Centres, 2025: https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres
- Reuters, Canada cancels proposed capital gains tax increase, March 21, 2025: https://www.reuters.com/world/americas/canada-pm-carney-cancels-proposed-capital-gains-tax-increase-2025-03-21/
- Justice Laws Website, Income Tax Act, section 212(1)(d), 25% withholding on rents to non-residents: https://laws-lois.justice.gc.ca/eng/acts/i-3.3/section-212.html
- Justice Laws Website, Income Tax Act, section 216, election to file a return on net rental income: https://laws-lois.justice.gc.ca/eng/acts/i-3.3/section-216.html
