Canada is welcoming foreign buyers from all countries! However there are a few rules that you need to be aware of.
- Non-Resident Speculation Tax: As of April 21, 2017, any individual who is not a Canadian citizen or permanent resident of Canada (including corporations and trusts) is subject to a Non-Resident Speculation Tax of 15% of the purchase price (paid at closing) for properties purchased in Toronto, Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York. For more information visit: Non-Resident Speculation Tax here. A rebate on Non-Resident Speculation Tax is available if:
- the foreign national becomes a permanent resident of Canada within four years of the date of the purchase or acquisition
- the foreign national is a student who has been enrolled full-time for a continuous period of at least two years from the date of purchase or acquisition in an “approved institution”
- the foreign national has legally worked full-time under a valid work permit in Ontario for a continuous period of at least one year since the date of purchase or acquisition.
- Mortgage: Most of the lenders that finance home purchases of non-residents require higher amount of down payment. Depending on your income, the amount you would be required to make as a down payment is between 35% and 50% of the purchase price. You do not need to be physically in Canada for a mortgage application as long as you have a Power of Attorney, however you have to be here to be able to open a Canadian bank account.
- Land Transfer Tax: When buying a property in Toronto, foreign buyers pay the same land transfer taxes as Canadian residents.
- Making an offer: You do not need to be physically here in Canada to make an offer. I have been showing properties to my foreign investor clients on Skype, WhatsApp, etc. Once you are ready to make an offer, all the signatures can be done electronically with the click of a button.
- Property Management: If you would like to rent out your investment property contact me to learn more about property management services I offer.