As a foreigner buying a property in Canada can be confusing. But the major question that may hit your mind is, “Am I eligible to buying property in Toronto”? The answer is yes. Canada’s real estate market is exposed to anyone living exceeding the country’s borders, including Canadian citizens and non-citizen likewise. That involves ex-pats, investors, anyone from overseas who’s planning to live in the nation for the long-term—you name it.
What’s more, there are no constraints on the type and amount of property you can buy in Canada, including Toronto. If you are a non-resident buying property in Toronto, there are many opportunities to get into an investment property by buying real estate. You may have various real estate questions, and you’ve come to the right place.
Before moving ahead, if you are considered a non-resident in this country. Here’s how Canadian law distinguishes those who aren’t residents of Canada:
- Anyone who routinely, usually, or customarily lives in another country is not considered a resident of Canada.
- A person who has no significant residential ties in Canada. Also, those who have either been outside the country throughout the tax year or has stayed in it for less than 183 days in a tax year.
If you fit the category of a non-resident and the dream of buying a property in Canada has spanned your mind, this article is on time to take you through the basics of what you should do.
Before You Begin Your Search For Buying Property In Toronto
To begin with, you should prepare a checklist for things you should do before you search for the right property in Canada. You can also seek the help of reputable professionals, including a real estate agent and a mortgage broker. They will lead you through the complex and demanding elements of this process, extending from taxation, funding, and insurance to home inspection, buying, and selling.
Spare some time to recognize a competent and qualified investment consultant besides sharing information and ideas beneficial to your journey of buying property in Toronto. Most specialists are a ‘one-stop shop’ where you’ll get attached to various experts who will assure your requirements, expectations, and goals are met.
That being said, we’ll share the basics and essential information about each of the processes below:
Taxation
Like any other investment, real estate in Canada is directed to tax. To know and completely understand the tax implications of buying or selling a property in Toronto. You will need to consult with a Canadian tax accountant.
Make sure to ask them about their years of experience and expertise about your particular tax situation.
And as you do that, here’s what you should know first:
No matter whether you’re a non-citizen of Canada or a permanent resident of the country or a foreign company, or taxable trustee, any purchase you make of a residential property in the Greater Golden Horseshoe Region (GGH) is subject to a 15% foreign buyers tax, which they term as a Non-Resident Speculation Tax (NRST).
However, there are exemptions and deductions as well. You can find out if you qualify for either by looking at the overview of the Non-Resident Speculation Tax. One such exemption is if a Canadian citizen is involved in the purchase process.
Financing
Toronto’s housing market is one of the most powerful, with frequent episodes of property prices and sales increasing, stabilizing, or shaking. Part of your preparation to manage these eventualities should be to have your stocks in a Canadian Bank set to put to use.
Keep in mind, the exchange rates do often fluctuate, not to mention the complexities and obstacles of transferring money into Canada from a foreign nation. Given the nature of the real estate market, such incidents can quickly ruin your plan.
Usually, when presenting your offer to purchase a property in Toronto, you’ll have to provide a deposit. This is generally 5%-10% of the property’s purchase cost. That has to be done within 24 hours and in the form of a bank draft, money order, or approved cheque in Canadian dollars and from a Canadian Bank.
It’s, hence, a great idea to plan to meet with a Canadian bank manager or make a special visit to a bank to open an account. As an immigrant, you’ll need proper identification and to go to the institution in person.
Seeking A Mortgage
Although you may know much about the mortgage market in Toronto. There’s even more to get when you enlist the guidance of a licensed mortgage broker to get a loan. Besides having access to a good number of Canadian banks, they are better positioned to negotiate a friendly rate for you through excreting a situation where you have to move from bank to bank seeking a better rate.
Insurance
You are going to want financial security against crime, fire, and other unexpected events that may harm your property or personal belongings. On the tip of that, when applying for a mortgage, lenders ask that you manifest proof of homeowner’s insurance for your property.
For a non-resident, purchasing insurance is sometimes tricky and quite costly. You should consider attaining ways to obtain a policy, given its significance in the above situations. Note that, unlike auto car insurance, homeowner’s insurance is not compulsory in Canada.
Home Inspection
An inspection of the physical condition of a property is a crucial part of the home-buying process. This should be added to your investment contract as among the conditions of closing the sale.
Get a licensed inspector or contractor to check the building’s structure, its physical components, and practices for errors and malfunctions. That includes roofs, paint, windows/doors, heating/cooling systems, the foundation, and so on.
Home Buying & Selling
These two methods may seem apparent, but a lot is involved, and an investment consultant can help you drive either with ease. For instance, a general question we get requested often is, “does one need to travel to Canada to do a property search?”
You can seek properties online, hire an agent to do so, and buy a property from anywhere in the world. But, there are critical stages in this process where you’ll want to travel to Canada. You have to open a bank account which is necessary for the property buying process.
Other methods, like getting ownership of a property, generally known as a ‘closing,’ don’t require you to be in Canada.
Other experts, like a Toronto property management company, can assist you to look for quality tenants or manage the property. This is, of course, done at a price. The exceptional advantage of enlisting such a service is that you can own an investment property in Toronto without being concerned about running it from afar.
For more details, get in touch with our expert team today.