Updated January 2023
Canada has implemented a new law, which came into effect on January 1 this year, that seeks to restrict foreign buyers from investing in residential properties for the next two years. This move has been seen as an effort to address housing affordability issues and ensure any gains in real estate values remain within Canadian markets.
This said, certain exemptions have been put in place to ensure exceptions apply for fair circumstances. For instance, citizens of other nations currently studying or brought over as workers may buy one residential property during their foreign stay if they plan on transitioning to permanent residence.
Moreover, refugee claimants, consular staff and those with various diplomatic statuses can purchase these properties without further restrictions. Additionally, residential purchases can still be made in areas with less population density.
If you need updated information regarding laws and regulations, please reach out to us. We can provide you with the latest information to help you stay compliant. Keep in mind that the information provided in this blog may not be applicable at the moment.
Who’s Interested In Buying Property In Canada?
Of all the countries in the world, Canada has one of the best reputations. Known as a friendly country that’s inviting and open, inhabited by people who are welcoming and respectful of others’ cultures, here those keen can enjoy and connect with others.
As I often get asked if it’s possible to buy a house in Canada as a non-resident, this blog is aimed to answer all your questions around this topic.
People flock to Canada relentlessly every year to tour this beautiful and impressively large country and get a taste of its culture.
Many people also travel here with more serious intentions. They don’t want to only visit Canada for a week or two, but they want to settle down and build a future here.
So the question that first arises when looking to invest or move to Canada is: Can I buy a house in Canada as a non-resident?
When planning to live in Canada for the long haul, all the logistics need to change. Instead of looking to rent, you may need to consider purchasing real-estate and plan for something more permanent.
You may want to start owning your private property and become more secure in your life, start a family, and get a more stable job. Or you may, just as well, make good use of the Canadian investment properties out there. For some approaching the end of their careers, buying property in Canada translates into having a place of their own where they can retire.
Regardless of the reasoning behind it, all you know is that you’d like to buy a house in Canada, and you want to know if you can do that as a non-resident.
For those of you who have not become residents yet, nor are looking to become one before buying a property here, many questions might be lingering.
The most common ones my clients have approached me with are:
- How friendly and permissive Canada really is?
- Does it allow foreigners to become owners of a residential property, and if so, what are the requirements for them to be able to purchase?
- How much money would I need to buy property on Canadian land?
- What are the property taxes I should know about?
- Can I buy a house in Canada as a non-resident?
- What happens when foreigners buy property?
These are all questions that need a clear answer, especially if you want to act quickly. In this article, I will show you what the rules and conditions are for a non-resident buying property, with a special focus on British Columbia.
Can a Non-Resident Buy a House?
In short, yes, and it’s not even that difficult.
While it’s true that Canadian residents looking to purchase a house in their own country may have it easier, the good news is that Canadian property is also available for non-residents to purchase.
So if you’re wondering whether you can buy a house in Canada as a non-resident, the answer is yes, absolutely.
In fact, the Canadian government makes owning real estate a true possibility, not only for residents but also for those that have not yet earned this privilege.
You are considered to be a Canadian non-resident if:
- You stay in Canada for less than 183 days a year.
- You live outside Canada throughout the tax year.
- You routinely live in another country.
- Canada does not constrain anyone in terms of citizenship or residence when it comes to allowing the right to buy property on Canadian land. In other words, there are no restrictions on the type of property you can purchase or how much you can purchase.
There is a side note here, though. Canada now has a Non-Resident Speculation Tax that varies depending on where in the country your property is located. In the case of British Columbia, foreign non-resident buyers pay 2% in tax.
What Are The Property Taxes I Should Know About?
If you are a non-resident and are thinking about buying a house in Canada, you need to be aware of all the taxes involved. For example, there’s the provincial transfer tax that varies from province to province. This will be at approximately 1% on the first $200,000 you spend and 2% on the balance.
Depending on where you’re looking to buy, there might be an extra fee to pay as a foreign buyer. You will also have a municipal tax to pay, which includes school and other taxes, and which is based on the assessed property value. You can expect your new home purchase to also be subjected to the Goods and Services Tax (GST).
Real estate investors should conduct thorough research on all the taxes they’d be subjected to when owning property in Canada. Any additional tax should be well known from the beginning, so there are no unpleasant surprises down the line.
If you don’t intend to become a resident of Canada yourself, and you’re just buying a property as an investment or to rent out, there are additional taxes you might have to pay.
Can I Live In Canada If I Buy a House?
Many people think that buying a property will also give them instant citizenship rights.
Unfortunately, as purchasing property in Canada does not earn you any immigration privileges, non-resident buyers will still keep their status and the same privileges, which grant them the right to stay in Canada 6 months or less at a time. This also applies to British Columbia.
So if you’ve been wondering whether Can I buy a house in Canada as a non-resident? The answer is yes, you can, but you will still need to earn your way to residency.
How Can a Mortgage Broker Help You Purchase Property In BC, Canada?
Those looking to purchase property in BC as non-residents should know that the Canadian mortgage system does not allow foreign banks to register mortgages in Canada.
At the same time, finding a bank here to trust you with a large amount of money can also turn out to be a difficult process when you are not a resident.
To get a mortgage from a Canadian bank, you might be required to show the following documents:
- A deposit of at least 35% of the value of the piece of real estate
- A Canadian credit check
- A reference letter from your local bank
- Proof of income, including bank statements showing your spending history
- A letter from your employer stating your salary
If all these seem a bit too overwhelming, talking to a British Columbia licensed mortgage broker can certainly facilitate this entire process for you, helping you get the house of your dreams with much more ease.
If you’re looking to buy a house as a non-resident in Canada, a local mortgage may just be the easiest solution for you. I can guide you in working both with local banks and alternative mortgage lenders and help you choose the best solution for your unique situation.
If you already own property in the country and are a non-resident looking for different mortgage options, you can find out more about home equity loans, 2nd mortgages, and private lenders on our website.
So don’t hesitate to contact us and, together, we’ll find the solution that best fits your needs.
In the meantime, you may want to check out these related articles;
- BC First-Time Home Buyers’ Programs & Mortgage Options
- How To Find Hard Money Lenders In Canada
- How Many Mortgages Can You Have In BC, Canada
