Information for Foreign Investors
Buying a Home in Canada
In British Columbia, there is no restriction on non-Canadian residents purchasing property. The government defines a non-resident as any individual staying in the country six (6) months or less out of a year; a resident is an individual that stays in the country for greater than six (6) months in a given twelve (12) month period. You will be required to open a bank account to purchase a home.
Please review my buyer's page if you wish to better understand the process of purchasing a home or investment property.
Financing your purchase
Foreign banks will not lend if the security for the loan a property located in Canada, so any mortgage would have to be placed with a Canadian Bank or Mortgage Brokerage. Financing is available for up to 65% of the purchase price of the home for non-resident purchasers.
In Canada, the typical mortgage is a twenty-five (25) year ammortization. Interests Rates can be fixed for periods of one (1) to ten (10) years.
Non-Canadian Residents will typically need to supply the following items:
Selling a Home in Canada
The sale of a property in Canada is much trickier than purchasing a real estate investment, as the owner may be exposed to tax issues which factor in both the rental income received and the capital gains on the property.
For the most part , non-Canadian residents are subject to tax on any rental income and capital gains from the sale of a property but only 50% of the capital gain is taxable. It is best to contact a Tax Account or Lawyer prior to commencing with the sale of your property.
To complete the sale, a Clearance Certificate from Revenue Canada must be obtained. It is best to speak to a lawyer to obtain this Certificate at an expected cost of $500. The process involves an accountant filing an income tax return on behalf of the property owner (seller). The Clearance Certificate outlines to CCRA that there are no outstanding tax issues with the property. In the event the Clearance Certificate cannot be obtained by the closing date, there will be a holdback by lawyer that is between 33% - 50% of the sale price. The normal time table to receive a Clearance Certiuficate is six (6) to eight (8) weeks, so it is very important that the seller has enough funds to pay off any oustanding mortgage balance.