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Chinese Buyer's Guide to Buying Property In Canada
By Juwai, 21 May 2021
Canada is a welcoming country to home buyers from all countries - as a potential buyer will not face restrictions on the amount or the type of property.
Here is a guideline on how you can start your chapter in Canada.
Foreigner real estate in Canada is not related to citizenship – even citizens of Canada who don’t reside in the country for more than half the year are considered non-residents, thus subject to all the same rules.
Any individual who is not a Canadian citizen or permanent resident of Canada will be subjected to a Non-Resident Speculation Tax of 15% of the purchase price for properties purchased in cities such as;
Please take note, owning Canadian property does not automatically give you any immigration privileges, as mentioned in Canada’s Immigration Laws.
The finance behind buying property in Canada
If you wish to purchase a property in Canada, they usually require significantly larger down payments - which could go up to 35% cash downpayment. If you want to request a loan from Canadian banks or lenders, they will require you to;
Furthermore, mortgage interest rates may be higher than Canadian residents would pay, yet the rates are still attractive.
The sum of taxes of buying property in Canada
Please do contact your accountant or financial advisor to understand fully how the purchase or sale of a property in Canada will affect you from a tax perspective such as;
Foreigners buying a property in the Toronto region must pay a 15% tax on closing.
When buying a property in Toronto, foreign buyers pay the same land transfer taxes as Canadian residents.
First-time homebuyers who plan to use the purchase as their primary residence may be eligible for land transfer tax rebates.
There are also tax implications for non-residents when selling a property.
Making the life-altering offer for a Canadian property
During a pandemic, signing the legal documents to make an offer on the chosen property can be done digitally. With Zoom and many smartphone applications, it’s easy to get the same advice and information from your Canadian real estate agent that you’d get if you were physically in the city of Toronto.
Reminder, some lenders require a foreign buyer to sign the mortgage paperwork in person, so have a chat with a lawyer for further clarification.
Choosing the perfect real estate agent or agency
Before you decide on anything, it’s essential to work with someone who knows the intricacies of foreign ownership within Canada’s real estate market.
Look for a real estate agent who has experience selling properties to non-Canadians and can refer you to property managers, lawyers and appropriate lenders for your circumstances if you’re looking to buy a Toronto property.
Also, look for a real estate agent experienced in previewing properties for absentee clients and familiar with the video tools and technology o ensure a smooth process.