The real estate market around Canada varies greatly, but it is appealing to foreigners in a number of regions. In the Golden Horseshoe region around Toronto, for example, many properties have been purchased by non-residents and foreign investors.
If you are considering investing in this region, you probably have a number of questions. Can foreigners buy property in Toronto legally, and are there any extreme difficulties in the process?
Today, learn about how foreigners can buy property in Toronto and what they must know before they get in over their heads!
Can Foreigners Buy Property in Toronto?
Can foreigners buy property in Canada and, more specifically, in Toronto?
Yes, foreigners are able to buy property in these areas. There are no rules that restrict foreigners from owning property. If a non-resident is interested in purchasing a property just a few days after they come to Canada, they will be able to do so, so long as they have the means.
With the right information and assistance, however, it is not a difficult process.
What Conditions Apply to Foreigners Buying Property in Canada?
Additional Fees And Taxes For Foreigners
When buying houses in some parts of Canada as a foreigner, you may be subject to paying additional taxes. These taxes include:
- Foreign Buyers Tax when purchasing the property
- Empty House Tax if no one has lived in it for a certain amount of time
These taxes have specific rules and regulations, and they vary from region to region. To find out more about whether or not you will be subject to these fees, work with a local real estate agent.
Finding Financing May Be Hard
Another aspect of the purchasing process that can be difficult for foreigners is finding financing options. Most mortgage options in Canada will require a larger down payment from foreigners, but it is possible to find options as long as you can verify your income.
Once you make the down payment, however, the effective interest rate is usually very similar between residents and non-residents.
Renting Out Property As A Foreigner In Canada
Can foreigners own property in Canada for the purpose of renting it out as an investment property?
A foreigner can buy property in Canada and they can rent it out, as long as they pay the appropriate taxes for doing so. Non-residents who collect rent in Canada are subject to having 25% of gross rent withheld for taxes. If you choose, you can file an official annual tax to lower your obligation via deductions, but it is not required to do so.
If you are filing with the CRA, you need to file an NR6 to claim income as a foreign owner.
FAQs: Buying A House In Canada As A Foreigner
Is Buying A House In Toronto A Good Investment?
Foreign investment in real estate in Canada has been a strong investment choice for many years because of the strong economy and price appreciation in the area. The real estate market is strong thanks to low-interest rates, strong local economies, and other regional factors. Smart investing in a property here is likely to be a good choice.
Can I Buy A House In Toronto As A Non-Resident?
Yes, it is possible to buy a house in Toronto as a non-resident. Purchasing a home as a non-resident in Toronto may require a higher foreign buyer’s tax depending on your citizenship status, but there are no other obstacles that prevent non-residents from purchasing in the area.
Does Toronto Have A Foreign Buyers Tax?
Yes. Anyone looking to purchase properties for foreign investment in real estate in Canada’s Toronto region, or those who want to buy a home there, will need to pay a foreign buyer’s tax. However, there are several exceptions where a non-resident buyer does not have to pay a Foreign Buyers Tax.
Can Foreigners Get A Mortgage In Canada?
Yes, foreigners can get a mortgage in Canada. Often, lenders will charge a higher down payment as a way to mitigate loss risk. However, the interest rates available to foreigners are typically the same as those available to residents.
How Much Money Do You Need To Buy A House In Toronto?
How much money is needed to buy a house in Toronto will be completely dependant on a wide range of factors including:
- Area of interest
- Property type
- Property size
- Property age
- Property condition
Be Purchase Ready
If you’re thinking of moving to Canada or purchasing a property for investment purposes in Toronto, make sure you are prepared for the following:
- Paying Foreign Buyers Tax for the property purchase only when applicable
- Risking a higher down payment when getting a local mortgage
- Paying an empty house tax in some areas of Canada (not applicable in Toronto)
Purchasing a property as a foreigner in Canada is not difficult so long as you are prepared for the additional costs that you might be subject to. As long as you are prepared, the process is not going to be too difficult.