Canadian Non-Resident Buyers: Buying Property FAQs

Canadian Non-Resident Buyers: Buying Property FAQs

Through the years, we’ve helped a large number of non-resident buyers in the purchase of their first homes in Canada. Throughout these years there have been many questions that come up quite often, so we’d like to share them with you ahead of time.

Non-Residents: Residency & Financing FAQs

Who can buy property in Canada?

Home buyers from all countries can buy property in Canada. In Canada, there are no restrictions when it comes to how many or what type of property you buy when working with a mortgage broker or private lender. However, if you’re working with a financial institution such as a bank, they may restrict how many properties you can finance. There is also a new tax for non-resident buyers as of April 2017, it’s called Non-Resident Speculation Tax. It’s a 15 percent tax charged to non-citizens and non-residents, this includes both corporations and trusts.

Will I have a better chance at immigration if I buy a property in Canada?

When your application to immigrate to Canada is being considered, unfortunately owning a property of Canada is not one of the determining factors considered. However, it will work into your net worth background information as it does carry value, although not a direct consideration for selection.

I’m a non-resident, can I purchase a property with a Canadian resident? How does this work?

Since you are a non-resident of Canada and you intend to purchase a property with a Canadian resident, they’ll also be treated similarly to a non-resident and subject to the same requirements by Canadian banks. This means a higher down payment will still be required. However, if you are buying the property with a permanent Canadian resident, who is also your spouse, you will not be required to pay the new Non-Residential Speculation Tax.

I am a non-resident, can I get a mortgage to purchase a home in Canada?

As a non-resident, if you have a minimum down payment of 35 percent to a maximum of 65 percent, then Yes, you can get a mortgage to purchase a home in Canada. This is the requirement of both banks and lenders in Canada. But banks are generally more strict, so you may have a better chance of recruiting a mortgage broker to help you with private lenders.

As a non-resident, what will qualify me for a mortgage?

As a non-resident in Canada, to qualify for a mortgage on a new property you will need to meet the following requirements:

  • Minimum 35 percent down payment, excluding gifted funds
  • A reference letter from you home bank
  • A letter of employment that verifies your income using the correct currency (CAD/USD)
  • Bank statements for last three months
  • Credit check from a Canadian credit bureau (Equifax or the TransUnion)

Since I’m not Canadian, what kind of interest rate will I get a mortgage?

Although you’re not a Canadian citizen you will still be eligible to receive the same interest rate as a Canadian citizen, as long as you meet the eligibility requirements. However, if you don’t meet the eligibility criteria, you can still get financing but you may be charged a higher interest rate. Also, you may only be eligible to receive a fixed interest rate if you currently reside in a country that doesn’t have a tax treaty with Canada.

Do you have any non-resident buyer questions you’d like to share with us, we’d love to hear from you. Contact us with your inquiry.

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