Real Estate Advice for Foreign Buyers
The real estate market in Canada has drawn international attention for years, as a market in which foreign investors can make strong returns and receive solid rental income.
Canada is also a popular country for immigration, and many immigrants plan to purchase their future home in Canada. However, before investing in Canadian real estate, it is important to look at what you need to know as a foreign buyer.
Citizens, are those who are either granted citizenship or are naturalized.
Permanent Residents, are people who have been granted permission to live and work in Canada permanently and have access to similar social benefits as citizens, however, they may not hold a Canadian passport or vote.
A deemed resident is someone who has stayed in Canada for longer than six months or has significant residential ties to the country.
A non-resident is someone who does not have permission to permanently reside in the country and do not have access to the rights of citizens or permanent residents.
A person of any of the above statuses may be required to pay taxes in Canada depending on the circumstances.
Can foreigners buy property in Canada?
Citizens, residents, and non-residents may buy property in Canada, even those that reside full-time in another country.
Tax Implications for Foreign Buyers
This tax only exists in Ontario and British Columbia, and is designed to make real estate less attractive to foreign homebuyers by adding a tax on any homes purchased or owned by non-residents. In Ontario the tax only applies to the Golden Horseshoe region and costs 15 percent.
Rental Income Tax
You will also be taxed 25 percent on any rental income as a non-resident.
If you own residential property in Canada that you do not live in and that remains vacant for a significant amount of time you may be subject to a vacancy tax. There is currently a limited number of municipalities that have implemented a vacancy tax.
Financing Your Purchase
The conditions for getting financing from a Canadian bank as a non-resident are stricter and you may have a harder time. Along with the large amount of documentation needed by the banks, you will also be required to pay a large minimum down payment of at least 35 percent and are ineligible to take a mortgage with an amortization period of greater than 25 years.
Purchase price, interest rates, and property taxes are all the same regardless of your status.
Can I stay in Canada if I buy a house?
Simply owning a property in Canada is not sufficient to provide you many benefits when it comes to immigration or applying for citizenship, as you will still be required to go through the same process and waiting period as any other immigrant to Canada.
Read more about this article here: https://www.canadianrealestatemagazine.ca/expert-advice/can-a-foreigner-buy-a-house-in-canada-334949.aspxPosted by Kevin Sharpe on