International Buyer Tips For Toronto

Do you live outside of Canada? Are you thinking about getting into the Toronto real estate market? We’ve put together this International Buyer Tips For Toronto post addressing the basics of buying property in the GTA. To get an even deeper understanding, make sure to check out our Frequently Asked Questions for Non Resident / Non National Buyers.

Do I Need To Be A Citizen of Canada To Buy Real Estate

Citizenship is not a requirement for non nationals or non residents to buy property in Toronto. Canadian citizens who do not reside here for more than six months of the year are considered non residents and subject to the same rules.

Canada is open for business and welcomes non national buyers from all countries. There are no restrictions on the amount or kind of real estate you can buy. However, owning a property in Canada does not give you any immigration privileges. If you want to live here you’ll still need to qualify under Canada’s Immigration Laws. This also applies to family members.

Can A Non Resident Get A Mortgage In Canada?

While Canadian lenders do finance the home purchases of non nationals, they usually require significantly larger down payments. Many of our non resident clients are required to have more or less 35% down payment. You will need to verify your income and credit worthiness to lenders and prove that you can pay the mortgage. Mortgage interest rates may also be higher than what Canadian residents would pay Rates are currently at an historical low.

What Are The Taxes For Non Residents?

As with any investment, it’s important to contact your accountant to understand fully how the purchase or sale of a property in Toronto or Canada will affect you from a tax perspective. The following is meant to be a guideline only:

When buying a property in Toronto foreign buyers pay the same land transfer taxes as Canadian residents. First time home buyers who plan to use the purchase as their primary residence may be eligible for land transfer tax rebates.

There are no additional taxes for non-residents when buying. There are, however, tax issues for non-residents when selling. There are forms, processes and penalties for non compliance with Canada Revenue Agency (CRA)’s rules. Details of the tax implications for non-residents selling property can be found on the CRA website though we recommend that you contact your accountant to understand the tax implications of selling a property in Canada as a non-resident.

Insurance

It’s sometimes difficult and more expensive for non residents to obtain insurance for an investment property. Given that proof of home insurance is required to obtain a mortgage, this is an important factor to consider. If you’re looking to buy a Toronto investment property, make sure to get insurance quotes and information before making an offer.

Making an Offer

In this day and age signing the legal documents to make an offer on a house or condo can be done digitally. It’s easy to get the same professional advice and information from your Realtor that you’d get if you were actually in Toronto. Many lenders require a foreign buyer to sign the mortgage paperwork in person. This can be avoided with an executed Power of Attorney.

Choosing a Realtor

It’s important for non residents buying property in Canada to work with someone who knows the ins and outs of foreign ownership. Look for a real estate agent who has experience selling properties to non nationals. They should be able to refer you to property managers, lawyers and appropriate lenders. If you’re looking to buy a Toronto property while overseas (vs. during a trip to Toronto) look for a Realtor who is experienced in previewing properties for absentee clients. They must be familiar with the tools and technology (especially video) to ensure a smooth process.

Please see our tips about how to choose the best REALTOR for you in Toronto.

We work with many non resident and non national overseas clients and regularly communicate with our buyers via Skype, FaceTime and other technologies. This eliminates the need to be physically in Toronto to choose a property to buy. We have a dedicated team of lawyers, lenders and insurance brokers who help our overseas buyers.

More information

Check out our F.A.Q. post, send us an email or give us a call to discuss buying a property in Toronto.

Looking to buy in Canada but not in Toronto? Pat Simmonds Real Estate Services has a network of top real estate agents across the country. If you aren’t sure who to hire, drop us a line and we’ll put you in touch with someone.

We hope these International Buyer Tips were of some help.