Top Tips for Moving to Canada & Buying a Property
According to the 2016 Canadian census, more than 7.5 million people of foreign origin have entered the country through its immigration process, accounting for around 20% of the country’s population.
While it is fair to assume that most live on rent for a considerable period of time, there are several who wish to go the homeowners’ way at some point.
If you interested in buying a home in Canada as an expat, here are some important things to know.
1. Why Move to Canada
There are so many reasons why you might want to live in Canada, benefits include:
Second largest country in the world with so many places to live
Tolerant, broad-minded and safe society
- Free healthcare
- Friendly native English speaking people
- Multicultural society
- Rich culture
- Good education system
- Strong economy
2. Can I Buy Property in Canada as a Non Resident?
Home buying rules in Canada do no relate to citizenship, giving foreigners practically the same rights as citizens of the country. This gives people of foreign origin the ability to buy any kind of property in Canada. While you are considered a non-resident if you live in Canada for less than six months in a year, you can still purchase property.
If you are not a citizen or a permanent resident of Canada, you might have to pay non-resident speculation tax of 15% of the property’s purchase price depending on where it is located. Some of the places on the list include Toronto, Waterloo, Durham, York, Wellington, Niagara, and Hamilton.
This tax has been implemented because of the surge in prices owing to significant foreign investment in the real estate market.
3. Rent or Buy
‘Should I rent or buy a home? ‘ is one of the most common questions expats ask upon arriving at their new location. The answer depends on several things and this is really important, as buying a property is usually the best option, but it isn't for everyone.
If you can you see yourself living in the country long term e.g. you want to work in Canada then buying a property is recommended. But if you have never lived in Canada before, or think you might not stay in a fixed location then renting might be better.
You will also need to check what you can get for your budget.
4. The Affordability Factor
Before looking for suitable homes, determine just how much you can afford. Take into account that homeownership involves more than just the selling price of the house. You also need to account for property taxes and ongoing maintenance, as well as valuation fees, home inspection fees, any applicable land transfer tax, legal fees, and insurance costs.
5. Where to Live
Canada is a huge country, and before buying a property you will need to decide what area of the country you want to live in. There are so many different places from large world famous cities to smaller off the beaten track locations.
Toronto is by far the most expensive city to live in Canada with prices for even tiny appartments at a premium. Other places which are also on the high side of prices include: Vancouver, Yellowknife,Mississauga, Regina, Calgary, Victoria, St. John’s, Newfoundland and Labrador, Edmonton, Ottawa and Oshawa.
More affordable places to buy include: Winnipeg, Barrie, Halifax, Charlottetown, Abbotsford, Hamilton, Ontario, Montreal, Quebec City and Moncton.
6. Types of Property Available
Homes in Canada come in different shapes and sizes, and can be broadly classified as:
With a condominium, you buy a single unit in a larger setup. You will need to pay monthly fees to the corporation that runs the condo toward maintenance and repairs. Condominiums tend to find favour with first-timer buyers because of the affordability factor.
Townhouses are typically attached to each other in a series of homes, sharing common side walls. Each unit has its own main entrance.
Semi-detached homes come with separate entrances and land, although they tend to share common walls as well as parking.
A free standing home where you own the land and the property built on it is referred to as a detached/single home. While this gives you more control and space, it comes at an added price.
From the outside, a duplex/triplex might look like a single home, although it is divided into multiple units. While the home is typically owned by a single individual, he or she rents the other units.
7. Can a Real Estate Agent Help?
Most homebuyers in Canada use the services of real estate agents to simplify the process. A good real estate agent can not only show you properties according to your needs, but guide you through other aspects such as home inspections and negotiation as well. What also helps is that real estate agent fees in Canada are typically borne by sellers.
8. Getting Financed
Canadian citizens may qualify for a home loan of up to 75% of a home’s selling price, but individuals of foreign origin tend to qualify for no more than 65%. This means you will need to pay 35% or more of the home’s price as down payment.
Besides, getting a home loan in Canada as someone who is new to the country might be a challenge because lenders tend to look for established credit histories. Getting pre-approved is a good idea as this gives you a clear indication of your budget.
9. Making Payments
Do you plan to make your down payment or pay any of the associated fees from outside of Canada? If so, think twice before using the services of a bank because most banks tend to fare poorly when it comes to convenience and cost effectiveness.
On the other hand, overseas money transfer companies such as OFX, TransferWise, CurrencyFair, Currencies Direct, and TorFX consistently offer bank-beating exchange rates.
We recommend iCompareFX which is an online platform lets people compare the world’s top overseas money transfer companies. It also gives you access to special promotional offers throughout the year.
10. Buying a Home in Canada is Fairly Easy
Buying a home in Canada as an expat is fairly straightfoward especially compared to some countries around the world. The fact that you do not need to pay real estate agent fees is a definite plus. All you need to do to make the process seamless is look for the right kind of professional help and exercise some patience.
So what are you waiting for, if you dream of buying a property as a foreigner there is nothing to hold you back.