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International Buyer Information


Based on the current legislation, foreigners who plan to stay in Canada for 6 months or less each year are considered non-residents. Everyone who decided to live in the country over the aforementioned timeframe should apply for the immigrant status. Despite the legal status, the authorities allow you to purchase and sell property, so purchasing or selling real estate in Canada is extremely easy.

Limitations may apply to certain provinces

In provinces like British Columbia, Nova Scotia, Newfoundland, Ontario, Quebec and New Brunswick there are no restrictions on foreign ownership of real estate in Canada. Nevertheless, there are certain limitations with respect to how much property and/or land you can own as a non-resident in these provinces. As far as the other provinces are concerned, the following foreign real estate ownership laws apply:

• Manitoba – you cannot own farmland in this province, unless you plan to move there within 2 years after the purchase

• Prince Edward Island – if you intend to buy a shore frontage bigger than 165 acres or more than 5 acres of land you will need to submit an application to the Island Regulatory and Appeals Commission

• Saskatchewan – non-residents aren’t allowed to own more than 10 acres of land

• Alberta – you can own a maximum of 2 plots of land that don’t exceed 20 acres

A word on mortgage



As a Canadian resident, your mortgage entails financing the equivalent of 75% of the value of the property and house, a loan available for 25 years. On the other hand, non-residents the ratio in most provinces is of 35% down payment and 65% mortgage. Qualifying for the mortgage means you will have to meet all the criteria imposed by the lenders, who evaluate the application on a case-by-case basis.


To make sure you’ll receive a good interest rate on the mortgage, it’s highly advisable to work closely with a real estate lawyer who can review your documents and advise you on the most suitable brokers. In general, lenders require up to 48 hours for processing the application and analysing the documentation submitted. The documents that you should include along with the application include:


• Income verification

• Credit bureau or bank report

• Tax returns

• Down payment confirmation (via a bank statement)

• Copies after 2 of your IDs

• Real estate appraisal


Take note that overseas banks cannot register mortgages in Canada. Therefore, if you’re interested in investing in Canadian real estate you should make the necessary arrangements for transferring your funds into a Canadian bank. The law also requires the borrower to work with a notary public or a real estate lawyer to prepare the mortgage documentation and registration with the Land Title office. These documents can be sent at your location – even outside Canada – for signing via courier. However, make sure they are signed and ready in advance of the completion date.

Buying property makes you eligible for taxation

Despite the fact that very few restrictions apply for foreign property ownership, keep in mind that you may become subject to Canadian income tax laws. To be more precise, you will have to account for the following taxes when calculating your budget for real estate purchases:


• Property tax – if the seller has already paid the property tax for the entire year to the municipalities, then you are obligated to reimburse a sum equal to the remainder of the year’s taxes;

• Property transfer tax – this represents 1% of the first $200,000 of the real estate’s fair market value and 2% of the remaining market value. Be sure to check the Property Taxation Branch website in your province of choice for more details;

• Goods and Service tax – the 5% taxation applies to newly erected houses and substantially renovated residencies. An extra 2% can apply for a new home where constructions or renovations were of at least 10% before April, 1, 2013. In the former example, the ownership transfers have to be done by April, 1, 2015. To learn more about the GST applicable in your case, don’t hesitate to check out the Canada Revenue Agency website.

Selling property in Canada

In the event that you want to sell real estate and you have the non-resident status, then you are mandated by law to inform the Canadian government within 10 days of the completion of the transaction. Upon notification, the authorities will issue a certificate of compliance which represents the proof that you made a pre-payment on the appropriate amount of taxes on any capital gain. On average, this means a taxation of 50% of the gain for Canadians and 25% for non-residents.


Processing the data for the certificate of compliance usually lasts between 6 to 8 weeks. Take note that unless you have this certification, the buyer is required by law to withhold a certain percentage of the selling price, a sum that is between 25% and 50% of your asking price.


SOURCE Suma Law - Canadian Immigration Lawyers

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