Foreign Buyers Guide to Shangri-La

Information For Overseas Clientele

You might think that purchasing a property in a country you are not a resident of would be a difficult process. In certain cases this is true but for non-residents interested in purchasing property in Ontario, it is quite simple. Ontario offers foreign purchasers the same ownership rights as Canadian citizens.

You are defined as a non-resident if you live outside of Canada for more than six months of the year. If you plan on staying in Canada for more than six months, it is necessary to apply for landed immigrant status.

 

The following is an overview of non-resident property ownership:

• If you are purchasing a property with a mortgage, as a non-resident you are required to pay a minimum of 35% of the purchase price as a downpayment. Lenders other than the major banks might accept lower downpayments, such as 25% but you may come across higher interest and mortgage insurance rates.

• If you are not in the country, your agent or someone you trust can represent you during the purchasing process if you give them the power of attorney to act on your behalf. As an alternative, the transaction can be completed via fax or courier service.

• For Resale Properties Property tax is paid by the owner of the property.

• When you sell your property, you will pay taxes on the gained capital which is the difference between the price you paid when you purchased the property and the amount you sold it for. If you become a resident prior to selling your property and this address was your primary residence, you will not need to pay tax on the gain capital.

• In case of death of a non-resident owner, the property is inherited by the successor. There is no inheritance tax applied. When the successor decides to sell the property, then tax is applied to the gain capital. But if the successor is a Canadian resident and the property is the primary residence, then the gain capital tax does not apply.

 

For a more detailed explanation, contact Martin regarding non-resident purchases.