Buying real estate in Canada

This resource is for Canadians living in the U.S. and further abroad who are considering purchasing real estate in Canada as an investment while living abroad, as they are getting ready to move back, or as a proactive step a few years ahead of their return. It is also useful for those coming to live in Canada for the first time.

This primer covers important questions, considerations, and steps for buying a condominium, house, or rural property in Canada. Many of my expatriate Canadians clients have asked me to help them navigate the real estate purchase process leading to common questions, concerns, and challenges that I address in this resource. In some cases Canadian expats have been away for many years and decades, making the process of purchasing now a daunting proposition. They need to figure out where to buy, how to finance the purchase, how the purchase process works now, and how to find professionals they can trust so they don't make any miss-steps.

This resource should be a help with these concerns!

Finally, I work with a team of high integrity professionals across Canada who continually inform my understanding of the evolving realities of opportunities, risks, laws, mortgages, selling and rental markets. As a result, this resource is kept up-to-date on a monthly basis and updated even more frequently as special circumstances warrant.

Important News:

Foreign Buyer's ban. On Jan 1, 2023 the Canadian government put a ban on foreign buyers purchasing houses in Canada for 2 years. This was extended in early 2024 for 2 more years, now ending in 2026 (maybe...unless they extend it again).

Important: Canadian citizens and Permanent Residents ("PR's") living in Canada or anywhere in the world can buy properties in Canada at this time. This "ban" is only for "foreign citizens" and foreign "corporations" and for certain types of properties, not you, the Canadian citizen expatriate who can purchase any property at any time anywhere in Canada regardless of the fact you are not a tax resident of Canada (you live and pay taxes in another country). If you are a Canadian citizen and want to buy a property in Canada? Go shopping! But be careful not to overpay as prices continue to be "flat" or declining in most parts of Canada as of Q3 2024 and there is every indication Q3 and Q4 2024 will see declining prices in many parts of Canada. Exception: Calgary in Q1 and Q2 saw high demand and rising prices. This may continue for awhile in Q3, Q4, and beyond...

Most markets in Canada as of Q3 2024 have been in a "mixed" state (a few areas with prices up, some flat, and many down) or a "buyer's market" state. Until March 2022 Canada saw rising and often skyrocketing real estate prices. Starting in April 2022 real estate markets across Canada experienced sometimes very large drops in demand and prices and this continued through 2023 and into 2024 in many places in Canada. Most parts of the Greater Toronto Area (GTA), for example, have seen 20% - 30% drops in price between their early 2022 highs and Q2-2024, depending on the location. These translate into between $200k - $1,000,000++ in price reductions since the market highs in March 2022.

Here are some considerations whether you are getting ready to purchase, sell, or simply for holding real estate in Canada:

• The second half of 2023 saw another interest rate hike by the Bank of Canada. This followed several in 2022 and 2023 that resulted in highest rates since 2009 and a total of 4.00% in the calendar year of 2022 (and more in 2023), the fastest and largest series of hikes in a calendar year since 1936. And the rate hikes in 2023 set an even higher benchmark. For uncertain and falling real estate markets across Canada, and very complicated economic times in general, this is putting further flattening or downward pressure on Canadian real estate demand and prices so far in 2024. Great for real estate buyers but at the same time debt becomes an issue in that mortgages, lines of credit, and other loans just got more expensive. So if you are taking on new debt or have a high level of existing debt be very careful to understand how higher interest rates will affect your finances and real estate decisions.
  
  Good news? Maybe? There was every indication interest rates would come down in 2024. By September 2024? Three 0.25% drops. Not a big change. But another 0.25% - 0.50% drop is possible in Q4. Prepare accordingly...
• Do not be pressured by your agent or anyone else into rushing a purchase or sale at this time. Fear Of Missing Out (FOMO) on selling or buying is a terrible fear. Step back from anyone who tells you to "sell / buy now!!!" Take your time to ensure you are thinking your own thoughts free and clear of the emotions of the "herd". Many bad real estate decisions are made while buyers are under the influence of FOMO.
• Include in a purchase offer "conditions" such as firm financing approval (if you need a mortgage), a property inspection (an absolute MUST) and if buying into a condominium corporation structure ("strata" in BC) include the condition of a lawyer's review of the last 5 years of the condo council's minutes, the depreciation report, the by-laws, etc. In a buyer's market you - the purchaser - have the power in a deal. Put in "due diligence" conditions to protect yourself at this time. There is less competition for many properties right now so you can take your time and be very careful.
• Watch for "mental normalization". Clients shared this very subtle problem: "When we arrived in Toronto within 3 weeks we had gone from thinking that a house of about $750k is reasonable for our context and goals. Now, just a few weeks later we seem to believe that $1.2 million is normal." In this case the clients chose to step back into their personal context and goals, even though in a stretch they could afford $1.2 million. They didn't like having unconsciously adapted to the Toronto prices and losing their personal context and goals. So they chose to move to Ottawa instead of Toronto as they had location flexibility. Suggestion: Step back from commonly accepted "normal" pricing wherever you are looking to buy so you can remember your personal context and goals!
• Do not buy a house sight unseen! You may be encouraged to do so by your real estate agent. Suggestions: Never do this. No. Non. Nyet. Nein. Nee. Nie. Nah. Naa. Nahi. Neyn. A condominium? Perhaps. There is lower risk with a condo purchase than with a house as there are fewer variables to understand about a specific condominium building and unit. Still not recommended, but if you must then at least you have more information to work with up-front on a condo purchase (Minutes of condo/strata council meetings, for example, and legally required disclosures).

If you have important real estate news affecting other Canadians, comments, feedback, or suggestions please let me know! Thank you!

Areas covered in this primer:

• Reasons for buying real estate in Canada
• Types of real estate...and trade-offs of the different choices
• Where are the best places to buy in Canada right now?
• Buying real estate in Canada from abroad: Legal, logistics, and your Team
• Getting a mortgage in Canada, and other financing options while living abroad
• Keeping your Canadian "non-resident" status while owning real estate in Canada
• Managing an investment property while living abroad
• Real Estate Roadmap & Professional Support

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Reasons for buying real estate in Canada

Obviously, there are many different motivations for buying property in Canada. Here are the common contexts of my clients:

• Canadians who live abroad and wish to buy a condominium or house to live in when they move back. Sometimes this is a year or two ahead of a return to Canada. Sometimes it is only a few months ahead.
• Canadians living abroad who are not planning on returning for many years (if ever), but wish to participate in the real estate market to take advantage of price decreases that have occurred since March 2022 in most markets in Canada and to earn rental income. Buying a property in Canada gives them the sense they have a financial and psychological "home base", a place to return to if they need to, and the sense that their money is "working for them" while they are living abroad. All great reasons to buy real estate in Canada!
• Canadians who have family ties to Canada that they wish to support. For example, a parent who is retiring back to Canada, a family member who needs housing in Canada, and a child entering university in Canada and needing a place to live. This last one: Buying a property for your college or university student to live in while they study in Canada is one of the best investments and parenting decisions you can make. Not only do both you and your son or daughter both win financially, but they gain maturity and real-life skills at the same time while learning to take care of the property and themselves while here in Canada on their own.

There are many others who wish to purchase real estate in Canada: Flight capital investors from Hong Kong, China, and other countries, international investors who buy properties in cities around the world, reverse snowbirds, businesses who need housing for their professional employees, and more. I have met many of these, all with their own contexts and reasons for buying real estate in Canada.

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Types of real estate you can buy...and some simple trade-offs:

The following table is a snapshot of key variables relating to real estate investment in Canada in Q3 2024. Your life context determines your location needs and desires, of course. If you have 3 children, for example, condominiums are really not on your radar. similarly, if you are "empty nesters" you may be more focused on condominiums in urban areas rather than rural land.

Use the information here to identify the mix of investment level and future oriented income + cost streams, including tax impacts, that fits your goals and needs. Being strategic with your purchase make sense regardless of the life context you are in:

Type of property	Scale of price/investment:	Price Trend:	Rental Income Potential:1	Taxes:
House in central urban location	Large: $500k - $3,000,000+	Prices continue to be generally flat or dropping with some smaller increases only in certain neighbourhoods of cities and large towns across Canada	Good	High
Condominium - central urban	Medium: $300k - $1,000,000+	Dropping in most places in Canada	OK - Flat	Medium
House - suburban	Large: $500k - $1,500,000+	Biggest cities: Prices flat or dropping in mid-range and high-end houses. flat or slightly rising prices in medium-sized and small cities and on entry-level houses.	Good	Medium
Condominium - suburban	Medium: $200k - $750k	Dropping in most of Canada.	Modest	Medium
House - vacation/destination2	High: $300k - $2m +	Still dropping or flattening.	Varies	Medium
Condominium - vacation/destination	Medium: $200k - $1 million+	Flat in most desirable locations or dropping	High	Medium
Rural home	Medium: $300k - $1,000,000	Flattening demand and dropping prices	Low	Low
Rural home + acreage	Large: $300k - $2,000,000+	Flat or dropping prices	Low	High
Empty building lot - suburban	Medium: $200k - $750k	Dropping - residential development stalling at this time	N/A	Medium
Empty land or rural acreage	Varies: $100k - $3,000,000+	Dropping.	N/A	Medium

Notes:

1. Rental Income Potential = rental income compared to the value of the real estate purchase and costs of owning it, such as property taxes. Example: $1,500 rental income per month on a $300,000 condominium is better than $2,000 rental income per month on a $900,000 house.

2. Examples: High demand cottage areas such as "cottage country" in Ontario and year-round tourist destinations like Whistler, BC where you might rent your property by the night through AirBnb.

Where in Canada are the opportunities right now?

As of Q3 2024 condominiums in the downtowns of major cities in Canada are dropping in price as people who wanted to buy in 2023 did so and many investors are now in trouble as their costs have become higher than their rents and they are desperate to sell. And a new condo construction boom has resulted in thousands of empty new condos in medium and large cities that developers can't sell. If you want to buy in anticipation of moving back and living in the property here are some interesting areas:

• Smaller suburb cities around major centres in Canada. Examples: Ontario: Oshawa, Belleville, Burlington, Hamilton, St. Catherines, Guelph, Barrie.
  
  Alberta: Local small cities and towns around Calgary.
  
  British Columbia: Surrey, Delta, Chilliwack, Langford (outside Victoria).
• Emerging very big cities: Examples: Ontario: Hamilton, Ottawa, Kitchener/Waterloo, London. British Columbia: Victoria, Surrey.
• "Special interest" locations. Examples: Retiree town target communities: Ontario: Small towns within 2 hours drive of the Greater Toronto Area, such as St. Mary's to the west and Bellville to the east. Ottawa was also a highly targeted destination between 2019 and 2021, though demand slowed in 2022. Nova Scotia: Suburban, semi-rural, and small towns around Halifax. British Columbia: Nelson & the Kootenays, Kelowna and towns throughout the Okanagan, Victoria, Comox/Courtenay, Campbell River, Salt Spring Island.
• Growth overflow: This is where a major city pushes outward, creating cascades of growth as far as 2 hours drive away. Examples: Ontario: Belleville, Barrie, London. British Columbia: Chilliwack, Hope, Squamish, Vernon, Nanaimo (ferry)
• A trend until 2019 throughout cities in Canada was a shift of interest to condos and townhouses. While the earlier 2012-2017 period saw tremendous growth in standalone house prices in most places in Canada, the big price increases that started in 2018 in Victoria, Toronto, and other cities were in condos and townhouses. Some speculated that potential buyers who wanted houses and were priced out of the market had adjusted their expectations and set their sights on smaller and more affordable accommodation. I feel this was certainly a factor but there were downsizing impacts too: Retirees moved into urban condominiums and out of high maintenance and costly suburban houses.
  
  By Q2 2020, however, these trends stalled and reversed: Downtown condominiums are no longer desirable, have dropped in price in major centres in Canada, and new buildings continue to come on the market to compound the oversupply problem. From Q2 2020 until Q1 2022 standalone houses in most place in Canada skyrocketed in price and so did townhouses in 2021, particularly. In Q1 - Q3 2024? High-end houses have continued to drop in price in most parts of Canada, low-end houses are flat or starting to rise modestly in price and condominium prices dropping in most markets (as of Q3 2024).
  
  Is there a buying opportunity for condominiums? Urban condominiums in desirable medium-sized and small cities in Canada and desirable locations in those cities can be an opportunity. Not the Greater Toronto Area or Vancouver, specifically, but cities of less than 500,000 in population that have areas with more of a walkable and community feel. On the other hand, if you are a long-term investor you may want to consider a particularly well-situated and desirable downtown Vancouver, Toronto, or Montreal condominium. Why? "Buy low, sell high!" The market is quite a bit lower and continuing to drop right now for these properties...

Notice something interesting about the areas of opportunities above? They are NOT in the big city centres. While there will be growth in Vancouver, Calgary, Toronto, and Montreal, for example, in the coming years, the prices are already high now, density is approaching maximum, and there is community push-back happening against increasing standalone house prices. Indications from my clients and professional associates are that if investment capital gain is a priority for you, larger gains will be found outside of the cores of big cities in Canada, and currently in condominiums and townhouses.

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"What will happen for the rest of 2024? Will prices keep dropping?"

These are, of course, the questions most people investing in real estate are asking.

As of Q3 2024 high-end and medium-end single family detached house prices in urban and suburban areas of large and medium-sized cities in Canada are down by up to 30% in some areas of the GTA, for example, and are often dropping in price. Entry-level houses are flat and even going up slightly in price. Some very special markets are still "flat" in Canada but generally all other markets are seeing less demand and dropping prices from their highs in 2021 and early 2022. These are no longer "normal times" and Q3 and Q4 2024 will likely see either generally unchanged conditions or slight increases or decreases - nothing major - in most markets in Canada.

In summary, prices did not stop going up throughout 2021 and early 2022 with increased demand and rising prices continued through Q1 2022 in the biggest cities in Canada. However, there was a flattening and significantly dropping of prices in most locations in Canada in Q2-Q4 2022 and all of 2023 that is expected to continue through the rest of 2024. Certain markets - and specifically suburban townhomes and entry-level houses in very special and high demand suburban neighbourhoods - will likely drop less in price than other areas but expect a minimum of 10% price drops in even these special markets. If you are considering buying real estate right now this is a sensitive time in the market and I suggest you be really, really careful until you are clear on what you want in a property and what is anticipated to happen in the market you are buying in. If you are considering selling, this is equally uncertain. If you are planning to sell and can still sell right now at a high prices do so because are falling even in "protected" markets.

Like the rest of the world we in Canada are in "new territory" economically and socially.

What about the 3-10 year range - mid-term to long term?

Here are three factors that will encourage stable or increasing prices in Canada in the mid-term and long-term:

1. The Government of Canada has high immigration targets for 2024 and beyond: Over 300,000 new immigrants per year rising to 500,000 in 2025. According to questionable news articles these have been exceeded to as many as 1,000,000 immigrants by the end of 2023 - these numbers included international students and temporary work visas. This has definitely kept continued pressure on real estate prices up until early 2022. Between July and October 2019, for example, Canada welcomed some 208,000 new residents which was a historical record high for a 3 month period! Note: Immigration did plummet in 2020 and has since only partly recovered but will never recover to full 300,000+ levels of "real" immigrants despite confusing information coming from official sources as to what the numbers of "real" immigrants are (versus spousal sponsorships, refugees, international students, etc). Canada's reputation as a desirable place to emigrate to has been deeply tarnished by various government decisions and behaviors and it will take many years for our reputation to recover. So this points to immigration being at best a "mid term" neutral impact on real estate markets in Canada but not a short term one, which is definitely "downward".
2. Growth in key high-skill areas. For example, technology, research, film/tv and medicine. BC has over 100,000 jobs in high tech alone. Amazon.com has been growing the number of high-paid, primarily software engineering positions in downtown Vancouver. Google, Microsoft, Shopify, MasterCard and others were expanding rapidly in Vancouver, as well, though as of Q4 2022 large tech firms had frozen hiring and there were even significant layoffs happening including in 2023. In Toronto there are more than 170,000 technology positions and growing. Montreal is becoming an AI and tech research centre with significant job growth happening. These jobs are prime feeders for higher-end real estate sales. Demand at the higher end of prices for real estate "pulls" demand up and "primes the pump" for growth at the lower price levels. Again, there was a "stalling" of tech growth in Canada and the U.S. through 2023 and in Q1-Q3 2024 but this growth may continue after we after we navigate our way through the current complicated economic times.
3. Continued relatively low interest rates. As of Q1 2024 interest rates had reached a new high for recent years and the largest cumulative annual increase in a calendar year since the 1930's (!). And while interest rates right now are a far-cry from levels that were 2x and 3x higher in the 1990's and early 2000's, the size of a typical mortgage is vastly higher today than it was in the past so every small increase in interest rates now has a big impact on your payment size.

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Buying from abroad: Logistics, legal, and your Team

This is a big topic area, so in the interest of keeping this resource reasonable in length, here are some key areas of consideration:

Travel to Canada first and explore your options

(even if you know where you want to buy)

Whether you are living abroad and plan on staying there for 20 years or you are moving back in 6 months time, visiting Canada is essential to understanding the current realities of the property market, lining up the professionals you need, and starting your search.

Many of my clients hire me to help them navigate the whole process and it is our discussions before, during, and after their visit to Canada that really clarifies their options and preferences, allowing them to be laser-focused on what they want to buy, and where.

Another reason to visit: If you and your spouse are planning on moving back to Canada, there will often be unconscious or unspoken thoughts, preferences, and concerns that will come to the surface when visiting, discussing, and hearing each other. Why? Because you have made space in your busy lives for this to happen. Such discussions pay BIG dividends in aligning your preferences and creating a common real estate focus. No, I am not a marriage counselor, but trust me when I say that a visit together to explore real estate is an investment with a big payback in the future for marital harmony. :-)

Legal aspects:

You can buy a property in Canada while you are living abroad. Once you know what you want, a real estate agent and lawyer can sometimes do the legalities remotely now if you are not needing a mortgage. If you need a mortgage for a purchase you can electronically sign an offer of purchase, but must physically come to Canada to sign the final mortgage agreement in-person just before the sale closes and you take possession of your property.

Caveat: There are more sophisticated professionals...and those much less so. Be sure to find a real estate agent, mortgage broker, and lawyer who understand that you live abroad and do not plan to come back several times to handle all the paperwork in-person (unless you plan to!) I cannot stress enough the importance of finding "worldly" and more sophisticated professionals to work with for your real estate research and buying process. See my Professionals page on this site which gives you 3 screening criteria for choosing professionals and a list of pre-vetted professionals in Canada you can trust.

There are specific government filings required if you are non-resident and will rent out your property, such as the NR6 and NR4 forms. Nothing onerous, but necessary to understand and there are simply legal processes you must prepare for. See the "Managing a rental property from abroad" below, for more on this.

Your Team

Here are key professionals who can be helpful:

• A mortgage broker if you plan to have a mortgage on your property.
• A real estate agent who will transact your property for you.
• A real estate lawyer who will handle the legal property transfer process.
• Optional: A professional advisor & consultant who can research real estate and financing options, scout, advise, suggest options, help you screen real estate professionals, and walk you through the whole process. They can also manage repairs and renovations, logistics challenges, and more while you are abroad. This is the work I do and is different from the services a real estate agent offers, for example, as I am working only for my clients (so no conflict of interest) and I have a much wider and deeper scope of understanding of your non-resident context and your needs than a real estate agent.
• A property manager who will manage your tenants and rental income filings (if you plan to rent out your property).

I am slowly building a team of high integrity professionals across Canada who can help - mortgage brokers, real estate agents (also called "Realtors"), lawyers, and more. Why "slowly"? Because I only work with high integrity, experienced, and caring professionals who are focused first and foremost on their clients' needs. Finding these takes time and care on my part. And the followihg is why I work so hard to ensure a great team, from a client in May 2024:

"That's when your little network of people clicked into action. In short, I got the house, I got a bridge loan established while my property here in California get prepped and sold. I honestly could not have parted with my little nest here without having a nest there to go to [in Canada].

Property transfer happens late June on the Island [Vancouver Island]. My house here is going on the market in 4 weeks (tidying up, packing up, etc.)

I'm excited again.

Your network is amazing."

If you are planning to buy a property in ON, BC, or NB "The Thoughtful Expat's Guide to Real Estate in Canada" can help:

Real Estate in Canada Roadmap

Ready to buy real estate and just need a Roadmap / Planner to guide your journey?

"The Thoughtful Expat's Guide to Buying Real Estate in Canada" is for you!

This Roadmap / Planner is a combination step-by-step guide, checklist, and education tool that will safely and confidently walk you through a real estate purchase. It starts with the research phase and ends with what to do in the first 30 days of you owning your property. It has been contributed to and regularly reviewed by real estate professionals to ensure it is as up-to-date as possible. Includes a glossary of terms you will need to know!

You can download PDF and Microsoft Word versions, the latter allowing you to tweak and customize the Roadmap for your needs and circumstances!

As the real estate market and process for buying property is evolving regularly, you will be notified of new editions of this Guide so you can download of them for free.

Currently available in British Columbia, Ontario, and New Brunswick, editions in Microsoft Word and PDF formats. After purchasing you can download all the editions and versions.

PURCHASE NOW

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Getting a mortgage in Canada (and other financing options) while living abroad

This is a major concern for Canadian expatriates living in the U.S., or anywhere in the world for that matter. Some insights that may be useful:

Interest rate sensitivity

For most people, the lowest interest rate rules their decision making around mortgages. They have a very small tolerance for differences in rates. For example, if a bank in Canada quotes a mortgage interest rate of 5.90% and a different lender charges 5.25%, they will go with the 5.25%.

No surprise, right?

Well, why would you go with the 5.90% option when you can get the 5.25%?

Because as a returnee to Canada or an expatriate investor you may have a wider range of concerns, including the fact that federally chartered banks won't give you a mortgage unless you put a 35% down payment before you return and can prove a Canadian income stream. And if you are an investor, interest is deductible from rental earnings, so if you plan to rent the property out, the impact of a difference in interest rate is not so significant, especially for a shorter-term mortgage (1-3 years).

How I became less sensitive to interest rates: For me it was easy: My first property, purchased in 1989, carried an interest rate of 12.25%. My next one? 8.50%. My latest: 2.84%. When the mortgage agent offered me the 2.84%, with a look on her face of "Is he going to complain it is so high?!", I just laughed and told her my mortgage history. 2.84%? So what? 4.50%? Not a problem! 6.00%? Still not a problem for me. My parents paid 5.25% on their mortgage in 1951 - 2.84% is just about half that rate.

Who cares about these low interest rates when you are going to pay off the mortgage with every payment, the value of your property is going to increase over time, and (if you are renting it out) your tenants are paying you income from which you can deduct interest costs? Moving back to Canada? You can always re-finance at lower interest rates in a year or two! You are not stuck for 25 years with a higher interest rate! The goal as an expatriate is to get in the market in a way that works for you initially, while you are living abroad or before you move back.

Becoming less sensitive to interest rates can reduce your stress and improve your mortgage options because you no longer look to Canadian "big 5" banks as your only sources of mortgage options!

The number #1 "fact" that I hear from all my clients and expatriate contacts? "We have to put 35% down. It is a fact."

No, it is not a fact. It is the percentage Canadian federally chartered banks require to give you a mortgage at a low interest rate if you are living outside of Canada. It is not true of other mortgage options, such as completely legitimate provincially regulated credit unions or private lenders.

Which leads to the next topic:

Canadian Banks are not the only source of mortgages

There are many trust companies, credit unions, private mortgage companies, and some individuals who lend money in the form of mortgages. These mortgages are just as legal, clear, and honest as a mortgage from a bank. These companies and individuals just want to make a good, safe return on their investments...just like a bank.

So why do most Canadians only look to "the big 5" banks for a mortgage?

They do so because they don't know other options exist and a sense that dealing with anything other than a major Canadian bank is fraught with unsavoury, dangerous risks. "Trust companies? Credit Unions? What are they?" Many of my clients didn't even know such companies exist, though credit unions are provincially regulated and just as safe as a bank. Private lenders? The private lender is seen be out to "rip you off" or will somehow take advantage of you. There certainly are a some "sharks" out there, but there are also many very legitimate private lenders. In fact, through some of the horror stories I am hearing from people dealing with the "Big 5 banks" there are "sharks" in banks, too! So, care is required regardless of the lender you choose to work with.

The 5 biggest Canadian banks laugh, of course, as they count their $42.6 Billion in net profits for 2023. "It is amazing how Canadians only know about and trust us! Boy, what a profit we make on that innocent trust!"

Where does this lead to? I personally had a bank mortgage on my last property. I had a private mortgage for 1 year before that, because it met my needs at the time...for a whole 0.16% higher interest rate than what a typical bank charged at the time.

Would you be willing to explore non-bank mortgage options? Options where you are not locked into the 35% down or Canadian income streams, for example?

Which leads us to "how do I access non-bank mortgage options?"...

Mortgage brokers and other lenders

One of your best friends as a returning Canadian citizen, Canadian expatriate investor, or foreign investor is a "mortgage broker" in Canada. These people take into account your whole situation and present your requirements to many lenders. And the best mortgage brokers in Canada work not only with banks and credit unions, but also with private lenders. They understand that you have an unusual situation, are not currently living in Canada or are returning after having been in the U.S. or abroad for many years, and have little or no credit history in Canada.

Suggestion: Find a more experienced and professional mortgage broker in the area you are considering buying real estate. By "area" this can mean "province" as a mortgage broker can arrange a mortgage anywhere in the province they operate. They are not tied to a specific city.

Need a mortgage broker? I am carefully building a list of professionals in Canada who work well with expatriate and returning Canadians, including mortgage brokers. Details: Professionals who understand Canadian expatriates.

Private lenders are another option. These are companies who have a few million or more in capital to invest and would like to make a good return on their investments compared to leaving their money in a bank account (which earns you about 1% or 2% at best!) This group of lenders also includes private individuals who want to do this kind of lending, sometimes simply because they enjoy investing in mortgages in their community.

Sometimes the seller of a property will hold a mortgage for 6 months, a year, or longer. Exploring such an option with them may make sense should you wish for transition time as you move back to Canada and get your job and credit history started, allowing you to access a more traditional lender later.

Another option that was shared with me was the use of an "international bank". HSBC, in this example, funded a mortgage in Victoria, BC when the person was still living and working in Dubai. Why? Because unlike Canadian banks, HSBC is global in scope and thinking. The branch manager in Victoria simply got proof from the branch manager in Dubai of the income and credit rating of the person who was working in Dubai and the mortgage in Victoria was approved.

And one more option: A client moving to Ontario found that getting a mortgage in Canada was a challenge. So they took a home equity line of credit on their home in California and bought a house in Ontario for cash. Then, they put their house in California up for sale and paid off the home equity line of credit from the proceeds of the sale. Interesting and empowering option, no?

And one MORE option: A client moving to British Columbia from Europe was able to withdraw funds from his investment/pension fund there tax-free to use as a downpayment on their house in Canada, lowering their mortgage level and making it much easier to negotiate one. (See how many options you might have?!)

Summary: You have options!

Before you let the Canadian bank portcullis slam down on your plans to buy real estate in Canada with a 35% minimum downpayment requirement, and other rules such as a recent Canadian credit history and a Canadian income stream, explore your real estate investment goals and financing needs outside of the traditional box. You might be surprised at what you find is available to you!

Special note: Have your downpayment in Canada 30-90 days ahead of financing

One rule that seems to be sticky for any major lender is to have your downpayment in a Canadian bank account 30-90 days (depending on the lender) ahead of the finalization of a mortgage and purchase of a property. A mortgage broker and former bank mortgage expert shared this with me. Please note that this applies to major banks and credit union lenders. As noted above, you have private mortgage options that do not have such constraints.

Another Special note: Never "email" your financial information!

A client of mine who is a retiring tech professional in Silicon Valley (California) was asked by a Royal Bank of Canada (RBC) mortgage employee to "email me your financial information" as part of the mortgage application for a property in Canada. My client asked the RBC employee to provide a secure "Dropbox" style upload area because information in emails and attachments can easily be intercepted, resulting in identity theft, fraud, etc. Something my client has expertise in as this is the industry they work in! The RBC employee had no idea what to do and had to ask other employees how to handle my client's very reasonable request.

Many Canadians, including some employees of "Big 5" Canadian banks, obviously, are woefully uneducated about security of private information and the potential impacts of asking for financial statements and other sensitive information to be sent by email, for example.

Further, if you use a Gmail, Hotmail, or other "free" email service you are openly allowing Google, Microsoft, etc. access to your email content and anything you attach to messages (such as financial statements) because you had to agree to this as part signing up to their free service! And not only are thousands of their employees able to openly see everything you write in an email and in attachments you send, but also so are third-party developers and other organizations who are given permission to look into your email account for the purposes of "improving services".

My client: "Please share with your readers: Never email your private financial information and any other sensitive information to anyone, including Canadian banks if they ask for it! Make them provide a secure upload service that is within their organization or print it out and courier physical copies to them!"

Done.

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"What do the Canadian mortgage "stress test" rules mean to me?"

The Canadian mortgage stress test rules that came into effect on Jan 1, 2018 will not affect you, the returning resident, expat investor, or foreign investor if you have a significant downpayment and the means to afford the payments on the property (including through rental income).

The mortgage "stress test" at a glance:

• Applies to everyone seeking a traditional bank/credit union mortgage in Canada, but really applies more to people with 10% - 20% downpayment, low income, and low liquid assets.
• The "test" calculates mortgage payments at a higher interest rate and compares this to ability to pay based on current income levels.
• As well, borrowers should not have a high total Total Debt Ratio, and must spend less than a certain percentage of their total income on housing costs such as utilities, mortgage payments, and property tax.
• While the mortgage stress test causes grief typically for young people with limited means who really want to own a condo or house, it actually protects them and the economy as a whole from financial stress, bankruptcy, and mortgage insolvency in a time of rising interest rates.

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Keeping your Canadian "non-resident" status while owning real estate in Canada

This is important: Your real estate in Canada must be kept as an investment, or as a pure "recreation property", until you move back, or you risk becoming a "deemed resident" and therefore liable for income tax in Canada.

Key principles to follow:

• Don't "live" fully in the property until you move back (utilities sent to the address, you stay in Canada most of the year, etc.) Really. Not you and not your dependent children. No immediate family members who are not on a formal arms-length lease. Exception: If you are supporting an elderly parent who lives in your property, for example, this is fine and will not deem you resident.
• If the property is "recreational", make sure it is really recreational: Keep it furnished but unoccupied for only your use or rent it to AirBnB guests, for example. Then, if you choose to stay in it a few weeks or a few months every year while you are visiting Canada it is still clearly a recreation property, and not your "primary residence" in Canada.
  
  Note: If you have a recreation property in certain parts of BC you may be liable for very hefty taxes on your property called the "Speculation and Vacancy Tax". Get help to assess your situation if you plan to buy a property in BC for recreation purposes. I can help if you have concerns in this area.
• Rent out the property on a lease or leave it empty. If you rent it out, make sure the rental has a third party-lease and is managed by a third-party property manager. This will keep the property as an "investment", which will ensure you aren't deemed a resident.
  
  If you choose to keep the property empty, for example buying it 6 months ahead of a move back, do keep it empty: No storing your belongings in it until you move back. Then your property is clearly an investment until you move back, not a primary residence in Canada. Note: Empty properties do require special home insurance policies. Just an FYI.
• Buying a pre-construction condo, townhouse, or house from a developer? Have care that you handle this as a "non-resident investor" so that you don't put your non-resident tax status at risk.

My work with clients usually includes careful consideration to ensure continued non-residency status and we construct a clear plan for the property. For those living in a low-tax environment abroad it is essential to be careful with your non-resident tax status if you own real estate in Canada.

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Managing your property in Canada while living abroad

If you are leaving your property empty (as many "flight capital" investors do with much gnashing of teeth in Vancouver by locals) then in most of Canada you can do this pretty easily, except for some key areas of BC and Ontario. BC in particular introduced targeted taxes a few years ago aimed at Canadian expatriate and foreign owners of BC real estate. Do be careful in BC and ON to understand what the current rules are and what will be happening tax-wise and legislatively in 2023!

If you plan to rent out the property, here are some suggestions:

• Have a professional property management firm take care of the property for you. This will not only keep a clear arm's-length relationship for non-resident tax purposes, but a good management company will do all the paperwork, government tax, and filings required. You must pay part of your rental income to the government every year, and they can handle this.
• How you pay tax on your rental income is important. The government gives you two options: A straight 25% cut or tax on the net income from your property. It is easier to do the first option - 25% - and then reconcile the overall net income at year end through a non-resident tax return to get a tax refund on an overpayment. Be sure to work with an advisor or property management firm to determine how to navigate this. The government even has to approve one form of the second option, which gets messy!
• Do not rent to immediate dependent family. Period. This puts your non-resident status at risk. To adult-age, independent family? This works somewhat better but may still run you amuck in BC with the Speculation and Vacancy Tax. To friends? Yes, but be very, very careful with this. Not for tax reasons, but because doing business with friends is something to be very clear about in your dealings. Money and friendships don't generally mix. Unless your real estate purchase in Canada is in anticipation of a move back, I suggest keeping the investment professional and offer it to third-party tenants only.

Summary

Buying real estate in Canada can be a great investment, as an anchor for your future return, as a pure investment, or for your first time move to Canada. Choose a team approach to your research, planning, financing, purchasing, and property management steps to ensure you can see all options available to you and put together a plan that works best for you.

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Would you like professional help with a property purchase in Canada?

I work with many expatriate Canadians purchasing real estate in Canada, either before they return to live in the property or as a strategic investment. They engage my support to advise and guide them starting with the research phase, working through the purchase process, and onward right to taking possession and renting the property out, if desired.

We start by working through a methodology of identifying key preferences and how to act on those preferences in a desired geographic location.

My scope is wide: From researching the best neighbourhoods for schooling to choosing a great mortgage broker and real estate agent. From making an offer to transferring funds to Canada for the purchase. From supporting renovations to an existing property to new home construction. And I offer professional research, guidance, and support for purchases anywhere in Canada!

Finally, I work only for you. This allows me to support your needs from a neutral and unbiased perspective, free of conflict of interest. My guidance and support are focused only on your needs.

Support packages: Simple, clear, and high value!

A. Professional Real Estate Consultation

When you need real estate questions answered, want to compare options you are considering, and wish to hear new possibilities, this consultation is for you! I can help with a full range of your considerations including legal, tax, mortgage financing, purchase logistics, referrals to professionals, and special purchase concerns when you are living abroad, such as transferring funds to Canada for the downpayment and closing of a purchase.

Includes a pre-conversation identification of your needs by email and a consultation by Zoom, Skype, or telephone.

Includes "The Thoughtful Expat's Guide to Buying Real Estate in Canada" Roadmap /Planner for those purchasing properties in BC or ON.

Get the clarity and confidence you need to move forward with your Canadian real estate research, planning, and purchase!

Fee: $225

"I normally respond quickly - within 1 business day."

B. Professional Email Support for your Canadian Real Estate Purchase

One year of professional support by email. I am here to support you from the beginning of your initial research and buying considerations right through to questions about taxes on rental income after you purchase and lease the property (if buying as an investment).

The topics and areas I support you with cover the spectrum of buying considerations and stages: From researching the best neighbourhoods for schooling and safety to insuring your property after your purchase. From getting a mortgage to connecting you with trusted professionals for financing, transacting, and managing your property. I support you with all questions and considerations.

Includes "The Thoughtful Expat's Guide to Buying Real Estate in Canada" Roadmap /Planner that can help you navigate the process for those purchasing properties in BC or ON.

Get the clarity and confidence you need throughout your journey to owning a property in Canada!

Fee: $400

Please contact me using the form below to engage my Professional Email Support!

C. Professional Real Estate Consultation + Email support for the duration of your research and purchase process.

An initial Phone/Skype/Zoom consultation lays the foundation for your purchase process and starts our work together. We continue after this by email, where I help connect you to key people, research and report on options directly to you, and provide analytical support for your real estate purchase. This differs from a real estate agent in that I work only for you. I am therefore highly responsive, focused solely on your needs, geographically neutral, and am unbiased as your advisor. I help you avoid costly mis-steps, save money on things you might not have thought of, and ensure you feel informed and confident throughout the purchase process. You get support for the duration of your research and purchase process, even if it takes one year!

Includes "The Thoughtful Expat's Guide to Buying Real Estate in Canada" Roadmap / Planner (ON and BC).

Professional guidance and support so you can feel clear and confident about your real estate purchase from start to finish!

Fee: $600 for the duration of your research and purchase process.

Please contact me using the form below to book a Consultation and begin working together!

D. Active representation of your interests for a real estate purchase.

Working by email, phone, online video consultations, and meeting in-person with you, if possible. Visiting properties on your behalf, reporting with photos, video, and written analysis of how they match your criteria. Connecting you to key people (legal, financial, real estate, inspection, insurance, etc.) and meeting with them myself if necessary, ensuring your interests are being served at all times. Closely following the purchase process to conclusion to ensure all key steps both legally and logistically take place professionally and with integrity.

Have a professional represent your interests so you can relax and carefully consider all your options, knowing you are free to decide and act without pressure!

Fee: $1,500 + travel expenses, for the duration of your research and purchase process. Includes initial consultations with you, on-going communication, 3 property visits and full analytical reports to you on the properties for your consideration. Subsequent visits: $150 each. My communication and incidental costs are included. Costs such as a travel expenses, professional home inspector fees, and legal fees are not included in this price.

Please contact me through the form below to begin a conversation about how I may support your research and purchase process!

E. Active management of the real estate research and purchase process.

Full on-site support from the start of your real estate research process to taking possession of your property, including post-purchase work, managing renovations, and arranging of property management (if any of these are required). Includes all of packages A. and B. above, but customized to the on-going needs of your research, purchase, and post-purchase processes. This work is done for you as a consultant, but I can also do it under a formal legal representation as well (power-of-attorney).

I am a Professional you can trust who works on your behalf to get the real estate purchase done from start to finish!

Fee: $100 per hour (daily and weekly rates available) + travel and out-of-pocket costs.

Please contact me through the form below to begin a conversation on how I may support your research and purchase process!

Real Estate in Canada Roadmap

Ready to buy real estate and just need a Roadmap / Planner to guide your journey?

"The Thoughtful Expat's Guide to Buying Real Estate in Canada" is for you!

This Roadmap / Planner is a combination step-by-step guide, checklist, and education tool that will safely and confidently walk you through a real estate purchase. It starts with the research phase and ends with what to do in the first 30 days of you owning your property. It has been contributed to and regularly reviewed by real estate professionals to ensure it is as up-to-date as possible. Includes a glossary of terms you will need to know!

You can download PDF and Microsoft Word versions, the latter allowing you to tweak and customize the Roadmap for your needs and circumstances!

As the real estate market and process for buying property is evolving regularly, you will be notified of new editions of this Guide so you can download of them for free.

Currently available in British Columbia, Ontario, and New Brunswick, editions in Microsoft Word and PDF formats. After purchasing you can download all the editions and versions.

PURCHASE NOW

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Contact Paul Kurucz

Your Name: Email Address: Phone Number: (optional) Where you live now: How may I help?:

(All communications between us are private and confidential)

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Contributions & Feedback, please!

Please contribute your learning and experiences, and suggest improvements to this resource page, so that other Canadians may benefit from your wisdom!

Thank you!

Paul Kurucz

Latest update to this resource: October 2024.

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I offer professional support to help you prepare for a smooth and easy return to Canada so you can feel confident and organized!

Your questions about when to move back, taxes, investments and finances, bringing back your household belongings, health care, and more will be answered promptly and professionally, with resources to back up what you need. My 20 years of supporting over 1,300 clients gives me a depth of expertise across all aspects of planning and returning to Canada.

Paul Kurucz - Canada

A happy client:

Hi Paul,

Just to update you - we landed and sailed through customs! So thank you so much for all of your advice...It was a thoroughly pleasant experience.

This is to say thank you for everything. Your advisory has been so incredibly helpful and saved us considerable time and removed room for error.

With best wishes,

Caroline

Paul's professional support

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Moving Back to Canada Planner!

A ready-made and up-to-date planner of questions, considerations, and actions to take as you prepare for your move back to Canada, organized on a timeline approach. Save hours of work and stress of trying to piece everything together. A companion tool to the full content on this web site.

Now available for immediate download. In easily editable Microsoft Word format so you can customize it to meet your planning needs. Also in PDF format.

NEW! If you are in the U.S. and moving back to Canada quickly your purchase includes a new edition as well: "Moving back to Canada from the U.S. in 30 days or less", in Word and PDF formats.

Testimonials: "Your moving guides and checklists are unbelievably helpful - frankly I don't know what I would do without them. You have covered everything including many, many things I would not have thought of. Thank you!!!" - C.W. April 2022. "The list of tasks is very helpful as I’m a list person. Just love checking off the boxes!" and "I must say I truly appreciate having purchased your guide to moving back to Canada. While we are still a couple months away it has really helped me keep all the "balls in the air".

Bonus #1 ! Includes the guide: "Canada in 2024: 10 Insights to Empower Your New Life in Canada." Written by Paul Kurucz from his experience helping over 1,500 clients return to Canada, this guide will help you better understand the Canada you are coming back to!

Bonus #2 ! Includes the "Real Estate Selling and Moving Checklist" to help you prepare for your move back to Canada if you will be selling your house, townhouse, or condominium!

Purchase and Download now:

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