What Non-Residents Should Know About Buying Real Estate in Canada

Investment Properties for Non-Residents Toronto Ontario

The good news for those who live outside of Canada is that you can purchase real estate in the country without having to be a resident or citizen. In fact, citizens of Canada who are out of the country for more than six months (182 days) are considered to be non-residents and are subject to the same rules as foreign real estate owners. It doesn’t matter where you live or what nation you’re a citizen of, everybody is welcome to purchase and own real estate in Canada. In addition, there aren’t any restrictions regarding the type of real estate you can own or the amount of it owned. However, be aware that there are no immigration privileges granted to non-resident property owners in Canada. This means you’ll still need the legal documents to reside in the country.


Non-residents generally require larger down payments for an investment property when they apply for a mortgage. This is usually a minimum of 35 percent of the price of the real estate and in some cases it may be as high as 50 percent. As with Canadian homeowners, non-residents will need to prove their income and credit rating etc. to prove they can afford the monthly payments. In addition, the interest rates may be higher than what residents pay.


Owning property in Canada as a non-resident can get a little complicated when it comes to taxes. It’s highly recommended that you get in touch with a mortgage or tax expert to find out as much information as you possibly can on this subject. In general, foreign buyers will pay the same land transfer taxes as residents and first-time buyers may get a rebate if the property will be used as a primary residence. Buying a property as a non-resident shouldn’t cost you anymore in taxes, but there are several forms which need to be completed if the property is sold. The Canada Revenue Agency (CRA) has numerous rules for this and it’s definitely worth your while to look over the tax implications on their website. But be aware that income tax has to be paid on an annual basis if the properties bring in income for a foreign owner. The one exception to this rule is that in British Columbia, as of August 2, 2016, a new foreign owners property purchase tax of 15% has come into effect, which has been done to try and curb the large number of foreign buyers entering the BC housing market for investment purposes. No other provinces in Canada are currently charging this tax other than BC.


International property buyers in Canada may find it costs more and is a little harder to obtain insurance for an investment property. And since you need home insurance to get a mortgage, you’ll need to look into this first before making an offer on real estate.


Making the offer
You don’t have to be in Canada to make an offer and to sign the legal documents since the digital world has made this easier. However, you may need to sign all of the mortgage documents in person or via an executed power of attorney.


Real estate advice
If you’re located outside of Canada, it’s highly recommended that you work hand in hand with somebody who knows the ins and outs of non-resident ownership. It’s a good idea to look for a mortgage broker and real estate agent with experience in non-resident properties. They’ll also be able to point you in the right direction when it comes to lenders, lawyers and property managers etc. With the right people helping you out, non-resident property ownership in Canada can become a lot less complicated and pretty straightforward.


MortgageMeister.com is a Toronto-based mortgage brokerage specializing in institutional and private financing for investment properties. Have questions about investing in Canadian real estate as a non-resident?  Speak to one of our mortgage investment property specialists today and learn how you can start investing in Canadian real estate.

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