Buying Real Estate in Canada
In Canada, the best time to search for buying Canada real estate is in the spring or summer. The real estate in Canada varies greatly in price depending on whether you are buying property in a city or in the country. It is more expensive around inhabited areas like Toronto or Vancouver, but the vast majority of the country is undeveloped land. Though Canada is one country, the provinces and territories are pretty independent from one another and often operate on different laws. Canada has tax treaties with many countries, including the US and Canada, in which you don’t have to pay taxes to your home country and to Canada.
Real Estate Agents
Most of the process is done through real estate agencies. You should report to an agent your interests, including location, price and taste in architecture. In Canada, most real estate agents are self-employed, and their rates are negotiable, not fixed. Purchasers have the right to buy from any real estate agent. There are generally two real estate agents involved in buying Canadian property, which are the seller’s agent and the buyer’s agent. Sometimes agents operate as dual agents, and they must bring this to your attention.
You must have your property surveyed before you buy it. This action may be provided by your seller, but it may not. You may need to pay for a surveyor, depending on the case.
You should also have a lawyer to review the Offer to Purchase, and also search the title background, come up with mortgage documents and deal with the closing details. At the end of the process, you must have a notaire or solicitor when you submit all of your final documents and close everything.
Rules, Regulations and Restrictions
If you plan to stay in Canada for 6 months or under each year, the government considers you a non-resident. If you plan to stay in Canada for 6 months or over each year, you are required to apply to immigration.
Canada has a ton of land; it is the second largest country in the world, in terms of size. Most of the provinces have no restrictions on foreign ownership of land on their premises. However, some provinces do restrict the amount of property or land that a non-resident is allowed to purchase. For instance, on Prince Edward Island, you are required to apply to the Island Regulatory and Appeals Commission if you are interested in land over 5 acres in size, or land within 165 feet of shore frontage. In Manitoba, foreigners can’t purchase farmland unless they will actually move there within five years. Foreigners are not allowed to own land in Saskatchewan exceeding five acres. In Alberta, foreigners are only allowed to own up to two plots of land, and these must be below 20 acres all together.
Unless you can pay for everything up front, you will likely need to set up a mortgage through a bank or trust company. You must first pay a deposit, usually around 20-25% of the total price. Then there are monthly installments with an interest. There are different regulations for first-time home buyers. Though not necessary, you should probably look into the financing process before you buy the property.
General Process
First, you must choose a place. Then make an offer; usually the amount you pay isn’t set and can change, like anywhere else. Once a final offer is reached, you should then make a legal written offer, which includes a deposit. This document is called the “Offer to Purchase” or “Agreement of Purchase.” The house then has to pass an official inspection of condition and structure. It is a good idea to have a local lawyer during this process to review all of the documents and do additional research.
Next, you must submit all of your final paperwork to your financing bank to review it; schedule a closing for this. Finally, everything is completed when you sign all of the concluding paperwork and deliver any necessary funds with the notaire. Some funds you will have to pay are subject to: down payment, transfer taxes, title insurance fees and mortgage-related fees.
Click here for information on taxes in Canada for non-residents.