Many of Canada’s cities have at some point been declared the ‘World’s most livable city’, a reputation earned on the basis of five indicators-infrastructure, stability, environment, healthcare, and culture. With an enviable record like that, Canada real estate is hot property.
With flat, sandy beaches and looming, gigantic mountains, vast open plains and bustling cities, Canadian real estate is as diverse as it is immense. Vibrant South Asian and Chinese communities add ethnic and cultural diversity to this exciting country.
Rules Governing Non-Canadian Real Estate Owners
Any non-Canadian who intends to purchase real estate within Canada and assemble tenants for rent must file form NR6 prior to receiving the first months rent. This form permits the property owner to remit taxes on their net estimated rental income. Those who do not file this form must remit 25% of their monthly rental income to the government-by the 15th of the next month.
Most realtors recommend filing for this certificate as soon as you accept an offer and are finalizing the close on your property. Avoid paying the 25% government royalty-file early.
Mortgage Information for Non-Canadian Real Estate Buyers
Several financial institutions in Canada have designed lending programs to meet the special needs of non-Canadian real estate buyers. Typically, property buyers are required to make a minimum down payment of 35% of the agreed upon price.
Canada’s new immigrant program permits individuals who do not have a permanent or settled status to buy property without having to make the traditional 35% down payment.
However, if you want to qualify for this exemption, you must meet or exceed the following requirements:
– Have a minimum 2 year work visa as well as a work contract of the same duration. Executives who get transferred can also take advantage of this allowance if they earn 60K per year.
– Furnish a bank reference letter
– Reside in Canada at the time of purchase
Costs Involved in Buying Canadian Real Estate
If you’re considering buying Canadian real estate, keep in mind the various miscellaneous costs that are associated with closing on a property.
A few basic costs may include include:
Taxes: Canada imposes a 7% tax on new housing, with an applicable rebate if the cost of the home is less than $450,000. Resale housing does not draw the tax unless it has undergone significant renovation. If so, it’s taxed as if it was a new house.
Property Taxes: Property taxes vary depending on location. Your realtor can give you details depending on your location.
Appraisal Fee: If your loan is uninsured, the lender may ask you to complete a property appraisal. Appraisals cost anywhere between $150 and $500. Appraisers generally charge based on square footage.
Other various costs could include lawyer’s fees, survey fees, property insurance and home inspection fee.
Buying real estate in Canada can be an exciting experience. The best advice is to plan ahead-both in property selection and financing.