Buying property in Canada – Image sourced via AdobeStock
(Partner Content) Interested in purchasing property in Canada? Find out what requirements are applicable to you and your immigration status.
Buying property in Canada – Image sourced via AdobeStock
For those looking at making a foreign property investment, Canada currently ranks as the third most stable and secure country for real estate investment. For those looking to buy property in Canada, requirements can vary depending on the type of Canadian immigration status that you have. While you do not require any kind of immigration status in Canada to buy or invest in residential property, in some provinces a lack of Canadian immigration status may result in you having to pay a foreigner tax on your investment of up to 20%.
As of April 21, 2017, those looking to buy or invest in residential property in certain areas of Ontario need to be aware of the 15% Non-Resident Speculation Tax (NRST) in the Greater Golden Horseshoe Region. Ontario is the most popular destination for new immigrants, with 64% of new immigrants listing it as their anticipated destination in Canada. This tax only applies to those who are not Canadian citizens or Canadian permanent residents or are foreign corporations or taxable trustees.
The second most popular destination for new immigrants to Canada is British Columbia, with 18% of new immigrants listing it as their anticipated destination in Canada. British Columbia also has a tax in place for foreign nationals looking to purchase property in Canada. As of February 21, 2018 the additional property transfer tax is 20% for foreign nationals, foreign corporations or taxable trustees purchasing a residential property in certain areas of British Columbia.
There are certain exemptions in place which a real estate agent or tax consultant can confirm for those looking to purchase residential property in British Columbia who do not have Canadian permanent residence status.
For those who have a Canadian work permit, study permit or permanent residence status, and are looking to purchase a residential property in Canada, mortgages may be easier to obtain than you think. Canadian banks and private mortgage lenders have programs in place to assist new Canadian residents in purchasing a property. The amount that you can borrow, and your interest rate, would be dependent on your income and the amount that you have available for a down payment. The current minimum down payment required in Canada is 5% if the property is worth $500,000 or less. For those putting less than 20% down, they will be required to have mortgage loan insurance. Canadian interest rates are currently as low as 2.09%. The most recent data available shows that 67.8% of Canadian own their home in Canada as opposed to 35.3% in South Africa.
Unlike other countries, such as the United States of America, Canada does not currently have an immigration program in place which allows people to obtain Canadian permanent residence by purchasing or investing in property in Canada. Owning property in Canada does not currently assist with a Canadian immigration application. At most, the ownership of property could be considered a positive factor for those applying for a Provincial Nomination and own property in the province that they are applying to. In these cases, however, it would not add any additional points to an application to own property in Canada.