FAQs for Non Residents

+Will Buying A Property In Canada Improve My Chances At Immigration?
Immigrating to Canada is a complex process and, unfortunately, buying real estate here is NOT one of the factors taken into consideration. Of course, it won’t hurt your chances and will be considered part of your overall net worth, but simply owning a home in Canada does not affect the selection process.
+I’m A Canadian Citizen Living In A Different Country. Would I Be Considered A Non-Resident For The Purposes Of Buying Real Estate If I’m An Expat?
Citizens of Canada who don’t reside in Canada for more than half the year are considered non-residents (and thus subject to all the same rules).
+I’m A Non-Resident And Want To Purchase A Property In Canada With A Resident. How Will That Be Treated?
If you buy a property as a non-resident, you will be treated by a Canadian bank as a non-resident and thus subject to the same requirements, including a higher downpayment.
+What is the Financing Process For Non-Residents?
Financing can be arranged through any of the Canadian chartered banks or through an independent mortgage broker. Usually non-residents will be asked for a higher downpayment: at least 35% by the major banks, while some lenders may accept 25%. A mortgage broker can assist you in finding the most attractive financing terms.

To Qualify non-residents will generally require:

  • A 35% downpayment (not from gifted funds)
  • A reference letter from their bank
  • An employment letter verifying income in Canadian Dollars
  • 3-6 months bank statements
  • Asset/Liability Statement
  • Canadian credit check
+What’s A Deposit
After you’ve made an offer on a property in Canada, you’ll need to provide a deposit – usually around 5% of the purchase price in Toronto – within 24 hours. That deposit is held in trust by the listing brokerage and forms part of the down payment when it comes time to take possession of the property. It’s a good idea to open a Canadian bank account and have the deposit in the bank account when you start the search for a property – when you are ready to pay the deposit, they can either issue a certified cheque for you, or they can arrange to send the deposit funds via wire transfer.
+ How Much Do I Need To Put Down And When Do I Need It?
Closing cost for every unit will vary but do expect the closing cost to be an extra of 2%-3% of your purchase price. Sample Breakdown:

Deposit Usually 5% of the purchase price in Toronto, paid within 24 hours of your offer being accepted
Property Appraisal $400-$500 (often paid by lender)
Home Inspection $400 - $600
Balance of the Purchase Price  the purchase price - your initial deposit. Usually, the bulk will come from your lender and become your mortgage
Legal Fees  Approximately $1,800 for a $500,000 purchase
Fire Insurance $800/Yr
Property Survey  $1,000-$2,000 (if Required)
Ontario Land Transfer Tax  varies depending on purchase price
Toronto Land Transfer Tax varies depending on purchase price
HST Applicable on RESALE homes only
+What Kinds Of Closing Costs Should I Expect To Pay?

There are 3 kinds of taxes purchasers need to pay when purchasing real estate:

  1. Land Transfer Taxes
    • Land transfer taxes are based on a sliding scale dependent on the price of the property. This is a one time fee paid prior to closing
  2. Property Taxes
    • Paid annually
  3. Income Taxes
    • Purchasing a property for rental will require you or your accountant to annually file certain forms to the Canadian Revenue Agency (CRA).  For non-residents receiving rental income, 25% of the rent received must be forwarded each month to the CRA as a withholding tax.  This forwarding must be done either directly by the tenant, or by a Canadian agent appointed by you as the investor.
    • On the sale of the property by a non-resident, the Buyer of the property must withhold and remit a portion of the purchase price to the Canada Revenue Agency (CRA). Generally this amount is 25% of the gross selling price. (Note that the actual tax owing may be different, this is just to make sure the government will get its money by stopping the money from leaving the country until they can determine what is actually owing.)
    • At the beginning of the following calendar year, non-resident seller have until April 30th to file a Canadian tax return. Generally, upon filing a tax return, part of the withholding tax is refunded to the Seller. At this point sellers can also claim expenses like legal fees and commissions against the income from the sale. Your accountant will advise you on whether it is favourable to file a return.
+What Kinds Of Taxes Will I Have To Pay?
We work with some excellent lawyers who are familiar with the intricacies of working with non-residents. We’d be happy to recommend them!
+Where Do I Find A Lawyer Who Can Help Me With The Purchase As A Non-Resident?

You don’t need to sign any of the offer paperwork in person – you can do that one of 2 ways:

  1. You can sign, scan and mail back the signed documents
  2. Sign the legal offer paperwork electronically
+How Do I Sign The Offer Paperwork?
As a non-resident, you will not qualify for the first-time buyer programs or land tax rebates offered by the Canadian government.
+Will I Qualify For Any Government Programs?
Costs for insurance depending on what you buy and where. A good insurance agent can guide you along and we be more than happy to refer you to our trusted agents.
+How Much Will Home Insurance Cost?
We help many of our investors find tenants. The cost to do is one month’s rent and involves pricing, marketing, screening and negotiating. We provide professional photography and expert guidance throughout the process.
+Can You Help Me Find Tenants?
We manage many properties for our clients. While the fees vary slightly, we generally charge a monthly fee of 5-6%% of the gross rent for condos and 8-10% for houses. That fee does not include finding the tenant (that costs one month’s rent) or the actual expenses to maintain the property.
+Can You Manage The Property For Me?
The investors we work with have different goals: some are concerned with cash flow, others with the appreciation in the value of the property and other investors are more concerned with building equity in the property via the mortgage being paid by the tenant. Feel free to connect with us to discuss what type of investment strategies best suit you.