If you are not a Canadian citizen but want to purchase real estate, there are, of course, rules and regulations.  Many of them vary by area, so be sure to double-check especially if you are interested in agricultural or recreational property purchases.

In order to determine your residency status, you should get solid clarification because it will affect your taxation.  For example, if you are married to a Canadian citizen or permanent resident and jointly purchasing property, you could be exempt.  On the other hand, if you are buying in with some Canadian pals, you could be liable for taxation even though you only own a small share.  Also, if you are making the purchase to rent the property and you have no intent to be a Canadian resident yourself, you may be liable for additional taxation.  Just be sure you get the right information the first time and before you put money down.

 Secure a Mortgage 

You may be required to secure a local mortgage.  Canadian banks have been known to require non-residents to offer larger down payments, like 35%.  You will also need to identify the source of the funds and gifts are not permitted.  Banks may be more lenient if you are a U.S. Citizen or buying the house to live in rather than as an investment.  Generally, this down payment is about 20%.

To apply for the loan, you will need a Canadian bank account, which you must set up in person.  If you are already banking with an international financial institution that has a Canadian presence, you may be able to set up your account remotely.  Transferring money internationally can prove expensive and will take several business days to clear.  Some currency specialists can expedite the process with a low-cost fee.

 Working through your own bank, you should verify exactly what will be required.  Usually, it is a deposit of at least 35% of the property value, a reference letter from your bank, proof of income, bank statements concerning your spending habits, a letter from your employer verifying your salary, and a clear Canadian credit check.

In addition to taxes, there will be some fees.  Both taxes and additional costs will vary depending on your non-resident status and the province in which you are making the purchase.  You can, however, expect:

•  Legal and notary costs

•  If purchasing in or around Toronto, Non-resident Speculation Tax (NRST) of about 15% of the property value.

•  Land transfer taxes

•  Annual property taxes or vacancy taxes.

•  Capital gains taxes if you are buying as an investment, which will come to about 25% of the sale price when it happens.

If you are indeed serious about purchasing real estate in Canada, a good place to start is with a Canadian CPA. A good accounting firm will be able to provide you with counsel and explain all of the intricacies of buying property as a non-resident and advice about the best way to proceed for your particular circumstances.

Contact your Accountants today click on this link —> https://capexcpa.com/contact