If you ask, “Can foreigners buy property in Canada?” the answer is yes. But there are some rules and restrictions you need to know about.
While Canada allows foreign investment in real estate, the government has put regulations in place to ensure Canadians can still afford to buy homes.
This post will explain how foreigners can buy property in Canada and the latest rules.
Foreign Investment in Canadian Real Estate: Can It Happen?
Yes, foreign investment in Canadian real estate is allowed. Foreigners can buy different types of properties, like homes, land, and commercial buildings.
However, there are rules to ensure that foreign buyers don’t make housing too expensive for Canadians.
In 2023, the Canadian government made a foreign buyers ban for residential properties. This means that non-residents (foreign buyers) are not allowed to buy homes in Canada for two years. The ban applies to cities like Toronto and Vancouver.
Non-resident property purchase in Canada is possible with some rules. Foreigners face taxes like the Foreign Buyers’ Tax and require a higher down payment.
The goal is to ensure there are more homes available for local Canadians, especially in areas where home prices are high.
Foreign Property Ownership in Canada: What Are the Rules?
When it comes to foreign property ownership in Canada, there are some rules to keep in mind:
1. Foreign Buyers Ban
The government has set a temporary ban on non-residents buying residential real estate (homes) for two years.
However, there are exceptions. For example, if you’re a foreigner with a valid work or study permit, you may still be able to buy a home.
2. Extra Taxes
In some provinces, foreigners must pay extra taxes when buying property. These include:
- Non-Resident Speculation Tax (NRST): In places like Ontario and British Columbia, foreign buyers may have to pay an extra 25% on the price of a home in some areas.
- Property Transfer Taxes: Some provinces charge additional taxes when property changes hands.
3. Higher Down Payments
Foreigners buying property in Canada usually need to pay a bigger down payment. Typically, non-residents must put down at least 35% of the property’s price when taking out a mortgage.
4. Permanent Residents
If you’re a permanent resident or Canadian citizen, you don’t have to worry about the foreign buyer’s ban and will face fewer restrictions when buying property.
Foreigners Buying Property in Canada: A Simple Guide
If you’re a foreigner wanting to buy property in Canada, here’s a simple step-by-step guide:
1. Check If You’re Eligible
Make sure you are eligible to buy property in Canada. If you have a work or study permit, the rules might be different.
2. Learn About Local Rules
Each province has its own rules. Some areas may charge extra taxes, like the NRST in Ontario or British Columbia.
3. Get Financing
Buying property as a non-resident can be harder. You might need a bigger down payment (about 35%) and need to meet specific credit requirements. It’s a good idea to talk to banks or mortgage brokers who work with foreigners.
4. Hire Professionals
- Real Estate Agent: Work with an agent who knows the rules for foreigners. They can help you find the right property and negotiate a good deal.
- Lawyer: You will need a lawyer to handle the legal parts of buying property in Canada. They’ll make sure everything is done properly.
5. Pay Taxes
Be ready to pay extra taxes, such as the NRST and property transfer taxes. These taxes can vary depending on where you’re buying.
6. Complete the Purchase
Once everything is in order, you can finish the purchase. Your lawyer will help you close the deal.
Non-Resident Property Purchase in Canada: What to Know
When non-residents buy property in Canada, there are a few important things to consider:
- You will likely need to make a larger down payment (35% or more).
- Be prepared to pay additional taxes like the NRST.
- It’s important to work with professionals who know how to help foreigners buy property.
How to Buy Property in Canada as a Foreigner?
Wondering how to buy property in Canada as a foreigner? Here’s what to do:
1. Do Your Research
Before you buy, research the local market. Learn about property prices, taxes, and any special rules in the area you’re interested in.
2. Work with Experts
Find the best real estate brokerage in Canada to help guide you. They’ll know the best areas to buy and will help you understand the rules. You’ll also need a lawyer who knows about buying property as a foreigner.
3. Follow the Rules
Make sure you follow all the legal steps, including paying the taxes and meeting mortgage requirements.
Final Thoughts
Yes, foreigners can buy property in Canada, but there are rules to follow. The government has set up measures like the foreign buyers ban and the non-resident speculation tax to keep home prices affordable for Canadians.
If you are thinking about buying property, make sure to do your research, hire the right professionals, and understand the rules.
Also, if you’re a new homeowner, check out the new home warranty program in Canada to get extra protection when buying a new home.
When you follow the right steps and understand the rules, you can successfully buy property in Canada as a foreigner.
