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Something You Need to Know Before Buying Properties in Canada

According to the Canadian Federal Government's "Citizenship Act", non-Canadian residents can also purchase, own, and sell real estate in Canada. The rules and conditions to be followed are the same as those for Canadian residents or citizens. This loose investment threshold, coupled with favorable conditions such as natural environment and educational resources, has resulted in more and more foreign buyers coming to Canada to buy houses in recent years. Some may wonder if they can get a mortgage when buying properties in Canada. The property transfer tax is also something they need to take into serious consideration.

Can foreigners get mortgages when buying properties in Canada?

When payment cannot be made in full, buyers need to get a mortgage. Most Canadian banks will require the down payment to be deposited 30 days before the end of the purchase, and the bank will track the source of the advance payment of the buyer within 90 days. Non-Canadian residents will be required to pay a 15% non-resident speculation tax when purchasing real estate in Toronto or Vancouver.

Non-residents want to buy real estate in Canada and therefore must comply with the same requirements, including a higher down payment. In most cases, Canadian banks and lenders will require non-residents to pay at least 35% of the down payment. If you purchase with a spouse who is a citizen, you usually do not need to pay a non-resident speculation tax. As a non-Canadian resident, if you want to qualify for a Canadian real estate mortgage, you usually need to provide the following materials:

① 35% down payment (not from the gifted fund);

② Recommendation letter from the bank;

③The employment letter verifies income in Canadian dollars or US dollars;

④ Three-month bank statement;

⑤ Canadian credit check.

Land transfer tax

The land transfer tax or property transfer tax varies among provinces. Land transfer tax is required in the provinces of Ontario, Quebec, British Columbia, Manitoba, Nova Scotia, New Brunswick, and Prince Edward Island, while other provinces and territories charge registration fees based on the value of the property being transferred. Following are the land transfer tax rate and fees in different provinces and territories.

  1. Alberta

The LTT fee in Alberta is $50 plus $1 for each $5,000 of land value and mortgage value.

  1. British Columbia

  1. Manitoba

  1. New Foundlandand Labrador

The registration fee when buying properties in New Foundland or Labrador is $100 plus 0.4% of the value of the property.

  1. New Brunswick

1% of the assessed value of the property or the purchase price, whichever is greater, is charged when buying properties in New Brunswick.

  1. Northwest Territory

There are two brackets of the registration fee in Northwest Territory. When the value of the land is less or equal to $1 million, $1.50 for each $1,000 of value or part (minimum fee $100). When the property value exceeds $1 million, $1,500 plus $1 for each $1,000 of value or part.

  1. Nunavut

For property valued at less than $1 million, the fees are $1.50 for every $1,000 of value, subject to a minimum fee of $60. For properties worth more than $1 million, the fee is $1,500 plus $1 for every $1,000 over $1 million.

  1. Ontario

  1. Prince Edward Island

The rate of Real Property Transfer Tax in Prince Edward Island is 1% on the greater of purchase price of the real property, or the assessed value of the real property.

  1. Quebec

  1. Saskatchewan

There are their brackets or the registration fee in Saskatchewan. There is no fee for properties valued under $500, and a $25 fee for properties valued between $501 and $8,400. For properties valued at more than $8,400, the title transfer fee is 0.3% of the property value.