International Buyers And New To Canada

Anyone can buy real estate in Canada, regardless of their home country. This would include condominiums, detached homes, luxury homes, commercial properties and farms.

Owning a property is considered separate from citizenship, and buying a property will have no substantial impact on your ability to become a citizen of Canada. Citizens of Canada who live abroad more than half of the year are considered non-residents, and are subject to the same rules as non-residents.

Yes, international buyers can get a mortgage in Canada. Most financial institutions will require a down payment of between 35 – 50%. Having proof of income or credit score can make it easier to receive a mortgage approval, if available. This may also reduce the down payment required to as low as 5%. We suggest speaking to a mortgage specialist.

You may be eligible for the same interest rates as Canadians, provided you meet the proper criteria through the lender. If you don’t meet the eligibility requirements, you might still be able to get financing from other lenders who offer higher interest rates.

If a money transfer is required, it’s advisable to begin moving the money into a Canadian bank account at your earliest possible opportunity, as you may encounter delays or restrictions on international money transfers. Canadian banks generally require you to be in Canada in order to open a bank account, but you might find some exceptions.

We always recommend speaking to a Canadian accounting professional about anything to do with taxes. The Canada Revenue Agency has many rules to follow.

You will, however, pay a property transfer tax, before receiving your keys to the property you purchase. In Ontario, we have an Ontario Land Transfer Tax, which is calculated on a sliding scale, and generally ranges between 0.5% to 2% of the value of the property. First-time buyers, who have never owned a home anywhere in the world, may be eligible for a rebate of some – or all – of their Land Transfer Tax.

In 2017, the Province of Ontario also introduced a Non-Resident Speculation Tax of 15% for certain properties.

A 25% withholding tax on rents collected may be applied to an international investor who sells their tenanted property, although you may be able to file a Certificate of Compliance to reduce or eliminate this withheld amount. You may also claim allowable expenses as deductions with the Canada Revenue Agency.  You are generally taxed on any income and gains in value of the property.

If you are arranging a mortgage, the lender will require proof of home insurance, which could range anywhere from $75 – $200 per month depending on the property, which will protect you against flooding, fire, and other property damage.

You may choose to represent yourself, or to enlist the help of a licensed real estate agent. In Ontario, brokerages and agents share their property listings using a system called the Multiple Listing Service (MLS). All real estate agents and their clients can view the active inventory of properties, and book showings with their clients.

The agent you work with is typically compensated as a percentage of the sale price through the seller, who pays the buyer’s agent and the seller’s agent. In general, there is no additional fee for you to use a real estate agent. Your agent can provide you with full access to listings for sale, and they can help you negotiate the best price and terms on the property you’re interested in.

For many of our international buyers, we tour properties via FaceTime or Skype, and provide the relevant details about the local economy, recent property sales, and other information to help our clients make informed decisions about their purchase.

We have many options available, but most of our clients prefer using electronic signatures, which are legal in the Province of Ontario. If your offer is accepted, you will typically need to wire transfer your deposit money (held pending completion of the sale) within 24 hours of acceptance. A normal deposit is between 1% and 10% of the purchase price of the property. Your money is held in the listing broker’s trust account, or a lawyer’s trust account, which is insured and regulated by the law.

Canadian banks will often require an in-person signature to approve your mortgage. If this isn’t possible, you might want to arrange a Power of Attorney to authorize a local family member or friend to authorize the sale.

In addition to your Land Transfer Tax on the completion/closing of the sale, you will also pay a lawyer to perform the necessary arrangements, which is an additional $1,000 – 2,000. A home inspection is generally around $500, and is done within a few days of an accepted offer.

Your ongoing costs for the property will be your mortgage, your municipal taxes, heat and electricity costs, and general upkeep and maintenance.

Your municipal property tax will contribute to local schools, roads, parks, police, fire, ambulance and transit. This is generally between 0.5% to 1% of the value of the property per year. The Region of Halton, which includes Milton, Burlington, Oakville and Halton Hills, has some of the lowest property taxes in Ontario.

Yes, our team is experienced in screening potential tenants, and providing ongoing services to our international landlords. Your typical investment is one month of rent, which is divided between the landlord’s real estate agent and the tenant’s real estate agent.

When you work with the Charlton Advantage Real Estate Team, you will have full access to our team of professional agents, home inspectors, lawyers, mortgage specialists and insurance advisors, to help guide you as an international buyer.