Non-Residents and Canadian Property Purchasing - What you need to know
Rules & Taxes
Contrary to what many are lead to believe, there are neither restrictions to purchase real estate in Canada, nor are there extra fees or tax implications payable at the time of purchase/closing. In fact, a non-resident may purchase as many properties as they so desire. The only tax implication would be when a non-resident rents out their Canadian property. In this case, they would need to file a Canadian Tax return declaring the rent as income, which would be a straight forward process.
Mortgages
Most lenders require non-residents to have a down payment of approximately 35-50% of the purchase price. In order to make the mortgage payments, a borrower must open a Canadian bank account from which the payments can be drawn. Qualifying for a Canadian mortgage is generally straight-forward, and would generally include an interview by phone, fax or email to discuss employment, assets and liabilities, employment and income. You will also need to provide copies of identification, and you may be asked to have this information notarized by a lawyer if you are unable to meet the lender in person. Non-residents may also be asked for a letter from their bank in their country of residence. It normally takes a between 1 to 5 days for approval depending on your particular circumstance.
Legal Info
A non-resident purchaser will need the services of a Canadian lawyer or notary to assist with transferring the title through the Land Titles Office and to prepare mortgage documents. When a Non-resident sells their property any gains received on a property will be subject to income tax.
Are you a non resident and would like to purchase property in Canada? I can provide many options for non-residents wishing to purchase a home and obtain a mortgage in Canada. Give Brent Irving a call at 604-764-6336 to discuss your mortgage options for a non-resident. |
