Can an international buyer purchase a home in Canada? Yes they can. Anyone, citizen or not, can participate in the Canadian real estate market from outside the nation. Anyone from outside the nation who intends to stay for an extended period of time falls under this category, whether they are an expat, an investor, or a visitor. Here are some tips to selling property in Canada to overseas investors.
Moreover, in Canada, including in the city of Toronto, there are no limits on the kind or quantity of real estate you can own. If you are a non-resident buying property in Canada, there are lots of chances to enter into an investment property by acquiring real estate. You may have numerous real estate inquiries, but you’ve come to the perfect spot.
You could be a non-resident but you aren’t sure. Those who are neither Canadian citizens or permanent residents are defined as such under Canadian law:
- Individuals who do not meet the criteria for Canadian residency due to their habitual, regular, or everyday residence outside the nation.
- A person who has no permanent residence in Canada and who has spent fewer than 183 days in the country during the tax year is considered a “foreign resident.”
- If you are not a Canadian citizen or permanent resident but are interested in buying a home in Canada, this primer is for you.
Before You Begin Your Search For Property in Canada
First and foremost, before beginning your search for the ideal property in Canada, you should seek the assistance of reputable professionals, such as a real estate agent and a mortgage broker, who can help you navigate the many facets of this process, from taxation and financing to insurance and home inspection before you buy or sell.
Please take the effort to choose an investing counsellor that is both qualified and knowledgeable. Most consultants are a “one-stop shop” where you may be linked to a wide range of specialists who will work to meet your requirements, objectives, and goals in the process of obtaining property or owning land in Canada.
Having said that, we will provide you with the fundamentals and critical details of each of the aforementioned procedures so that your investment is well-grounded.
Taxation
Real estate in Canada, like other assets, is subject to tax, and a Canadian tax accountant should be consulted in order to fully understand the tax consequences of buying or selling a home in Toronto.
Be careful to inquire as to their level of expertise and relevant work experience in the context of your unique tax position.
And while you do so, here are a few things to keep in mind: If you are not a Canadian citizen, a permanent resident of Canada, a foreign cooperation, or a taxable trustee, the Canadian government will add 15 percent to the purchase price of any residential property you acquire in the Greater Golden Horseshoe Region (GGH) (NRST).
But there are discounts and waivers available as well. Reviewing the Non-Resident Speculation Tax summary will tell you if you are eligible for either. There is an exemption if a Canadian citizen is engaged in the transaction.
Land Transfer Tax (LTT) is another form of tax to be aware of, and it applies equally to both international buyers and citizens of Canada. If this is your first time buying a home and you intend to make it your primary residence, you may be eligible for a rebate of this tax. Property tax and income tax are the remaining forms of taxation for which you are responsible.
If you are a foreign national selling real estate in the United States, you will be subject to a non-resident withholding tax equal to 25% of the sales price. There are usually paperwork requirements, processes that must be adhered to, and potential consequences for not doing so.
Visit the Canada Revenue Agency online for further information.
Financing
Real estate prices and sales in Toronto go through periodic cycles of growth, stability, and decline, making it one of the most volatile housing markets in the world. Having money on hand in a Canadian bank is an important part of being ready for any emergency.
Keep in mind that Canadian dollars might be difficult and time-consuming to transfer from other countries due to currency fluctuations and other factors. Considering how volatile the real estate market can be, unanticipated events like these can quickly derail even the best-laid plans.
Deposits in Toronto range from 5% to 10% of the buying price and are typically required when making an offer. Within 24 hours, you must submit a bank draught, money order, or certified cheque drawn on a Canadian bank.
Loan Application
Even if you have a thorough understanding of the Toronto mortgage market, you might benefit greatly from working with a registered mortgage broker. In addition to having relationships with a large number of Canadian banks, these institutions are in a better position to negotiate a favourable rate on your behalf.
Finally, knowing the closing expenses can help you determine how much of a mortgage you can afford. Some of the expenses we’re talking about here are:
- Value Paid
- Fees for bank appraisals
- Fees for Inspections
- Price of insurance
The buyer is responsible for paying the property transfer tax. One percent of the first C$100,000 is withheld, and the remaining two percent is taxed.
Insurance
There are a number of calamities that can cause significant financial loss, including fire, theft, and natural disasters. Additionally, mortgage lenders will want you to provide proof of homeowner’s insurance when you apply for a loan.
Although it may be difficult and costly for a non-resident to get insurance, it is strongly recommended that you do so under the scenarios listed above. It’s important to keep in mind that unlike vehicle insurance, homeowners insurance is not mandated in Canada.
Home Safety Checkup
Consider include a home inspection as a contingency in your purchase agreement to protect your financial interests and ensure the property’s physical condition meet your standards before you commit to buying it.
Hire an expert inspector or contractor to go over the building from top to bottom, inside and out, for any signs of damage or malfunction. Roofs, HVAC, paint, windows, doors, foundations, etc., all fall under this category. Sell Property in Canada Fast.
