Buying Real Estate in Canada
Canadian law does not restrict foreign nationals from purchasing or owning real estate within Canada. The laws regarding foreign real estate ownership in Canada have nothing to do with citizenship. Canadian ex-patriots who haven’t lived in Canada for 18 months and foreign nationals are also classed as non-residents. It should be noted however that owning real estate in Canada does not give an individual any privileges regarding the immigration process. To reside in Canada for over six months per year, one has to apply for permanent residency.
Those who fall into non-resident status in the country are required by Canadian lenders to put down at least 35% on any property purchase. Verification of your income and credit score are required as proof of ability to make mortgage payments. Non-resident buyers may also be subject to higher interest rates, and in some jurisdictions higher land transfer taxes.
Searching for a property in Canada
When seeking a property in Canada, it is strongly advised to engage a local real estate agent. They will offer the best advise on what and where to buy as well as have access to information regarding exclusive properties or listing that have not yet been listed to the general public. A local realtor will also aid in any stumbling blocks a buyer may encounter when attempting to purchase a Canadian property.
Putting in an offer
Once financing pre-approval is in place and the buyer has selected a desirable property, the next step is to make an “offer to purchase.” An offer can be firm or conditional.
A buyer can place one or more conditions that must be met in order for the transaction to take place. These may include a satisfactory home inspection, financial approval or the sale of the sellers current home.
This means the buyer will purchase the property with no conditions attached.
A typical “offer to purchase” will include:
- Buyer and sellers legal names, and the address of the property
- The price the buyer is offering the vendor
- Any inclusions involved in the sale, for example, kitchen appliances, furniture etc.
- The initial deposit amount.
- The date on which the deal will close (see Closing Date section below) which in Canada is typically between 30 and 90 days after the offer is accepted.
- Any conditions the buyer wishes to attach to the offer
- Request for a land survey
- Date of the offers expiration
Once the offer of purchase has been submitted, the seller may accept it, sign back a counter-offer or simply refuse it.
Once an offer is accepted the final hurdle is the Closing Date. This is when the buyer takes legal possession of the property. The final transfer will typically happen at either a lawyer or notary’s office. On closing the mortgage lender will transfer the balance of the sale price, and the buyer will surrender their down payment minus the initial deposit to the buyers’ legal representative. The lawyer or notary will then pay the vendor, register the property in the buyers name and hand over the deed and keys to the purchaser.
If you wish to find out more regarding buying real estate in Canada, please fill out the form in the sidebar and you will be contacted by one of our professionals to answer any question you may have.