Ever thought about buying property in Canada as an Australian? Either to live there or as an investment, buying a house in Canada for non-residents is actually quite a simple and straightforward procedure. There are a few legalities for non-residents to keep in mind which we will take a look at here, but they are all clear and easy to meet. Canada is a big, beautiful, country with many desirable locations. If you have ever thought about buying property there, this guide for a non-resident buying property in Canada will help you on your way to ownership.
Can I Buy a House In Canada?
The simple answer for Australian’s is yes you can. The country is very free and open when it comes to non-residents buying property in Canada. Anybody from any foreign country can legally buy real estate there without having any restrictions placed on them whatsoever. There is an additional speculation tax placed on non-residents of 15% of the sale price of the property. However, this tax only applies to certain parts of the country and there are no other legal requirements for citizenship or foreign ownership that exist in some other countries. A Canadian citizen can also be considered a non-resident if they have lived out of the country for more than half a year. If you are planning on emigrating to Canada, keep in mind that owning property there will not fast track you to citizenship. You will still need to apply and go through the Canadian immigration procedure to do so.
Canadian banks, in general, are more than happy to finance real estate purchases for non-residents providing that their lending criteria is met. This may vary from lender to lender, but in general, the requirements are:
- A 35% down payment
- A credit check
- Three months of bank statements and a reference letter from your bank
- A letter confirming your employment and income (in Canadian dollars)
As Australia has a tax treaty with Canada, you can expect to pay about the same interest rates as a Canadian citizen if you are eligible for a mortgage. Tax will vary depending on the area of Canada you are looking to purchase the home so it is best to clarify this with your accountant. For example, the Toronto area has four different taxes that need to be paid – the non-resident speculation tax, income tax, property tax, and land transfer tax. Failure to do so will result in having to pay a penalty. You may find insurance more expensive as a non-resident but it is a requirement for getting a mortgage so try and get a quote before making any offers on a property.
Buying Your First Home in Canada – The Procedure
You don’t need to be physically present to buy property in Canada. Local realtors will be more than happy to assist you online when choosing and viewing properties. Some can also help with building inspections and finding tenants to rent the property if it is going to be an investment rather than a place to live. Closing the sale can be done via a notary public in Australia, however, most Canadian banks will require you to open an account in person. The best thing to do is enlist the help of experienced realtors and lawyers who will be able to walk you through the process and make it as easy as possible for you.
Where to Look?
Despite Ottawa being the country’s capital city, the real estate there is well below the national average so your money may go further. House prices have also continued to rise there but slower compared to other regions.
Victoria, British Columbia
Real estate here has given investors and homeowners some fantastic price increases and returns on their money. And it is no wonder, there are a ton of top neighbourhoods in Victoria BC to check out when searching for your dream home.
Prince Edward Island
A bit out of the way perhaps, but housing costs are modest here and could be used as a potential holiday home investment.