Requirements For Foreign Buyers Of Toronto Real Estate
What You Need To Know Before You Begin Your Property Search
The first step to buying a property in Toronto as a foreign buyer is to be prepared by having a team of experienced professionals lined up to assist you. One of the benefits of working with a real estate agent that is a Certified International Property Specialist is that she has the experience to assemble this team of trusted advisers that you will require ensuring your home buying process goes smoothly and easily.
Seek advice from a Canadian tax accountant. If you are not a citizen or permanent resident of Canada, your purchase of a residential property in Toronto will be subject to 15% Foreign Buyer’s Tax called the Non-Resident Speculation Tax (NRST). You may be exempt or eligible for a rebate of this tax – Click here to find out more.
Be aware that there can be tax implications for foreign owners when they sell property in Toronto. A foreign seller may be subject to a non-resident withholding tax of 25% on the sale price of the property. Further details can be found on the Canadian Revenue Agency website. Consult with your own Canadian tax accountant to fully understand the Canadian tax rules and implications of selling a property in Toronto as a foreign owner.
Meet with a Canadian bank manager and open a Canadian bank account.
The Toronto real estate market is fast paced with properties selling quickly. For peace of mind be prepared by having the funds in Canada and ready to go. Sudden fluctuations in currency exchange rates and delays in money transferring from foreign countries can negatively affect the outcome of your home purchase.
When making an offer to purchase property in Toronto you will be required to present a deposit of 5%-10% of the purchase price in the form of a certified cheque, bank draft or money order in Canadian funds from a Canadian bank.
Canada is known for having the safest banking systems in the world and as a non-resident one can easily open a Canadian bank account by making a personal visit to the bank branch and providing applicable photo identification.
Hire a mortgage broker.
As a foreign buyer it is possible to obtain a mortgage on up to 65% of the value of the property. In order to qualify the lender will want to see income tax returns so they can verify your ability to carry a mortgage. Retaining a mortgage broker to assist you in the financing of your Toronto property can save you time and money. These licensed mortgage specialists have access to many Canadian banks and can negotiate the lowest rate for you. This eliminates the need for you to go from bank to bank to get their best rate. Because of the quantity of mortgages they deal in they get volume discounts and those savings are passed onto you. You can find a good mortgage specialist through your real estate agent.
Select a real estate lawyer.
You will need a lawyer when buying property in Toronto to process the real estate transaction. Normally they do not get involved in the buying process until the property has been secured through the Agreement of Purchase and Sale. The lawyer then reviews the terms of the Agreement, ensures the Buyer’s funds for the sale are paid to the Seller and registers the Buyer as the new owner on title.
Decide on a home inspector.
If you are purchasing a home, your realtor can provide you with names of good home inspectors. A home inspection can indicate if something in the house is not working properly, needs to be fixed or replaced or is unsafe.
Have an Insurance Broker lined up to provide you with property insurance.
In order to protect your real estate investment against risks such as fire or theft you will need to have property insurance. This is obtained through an insurance broker.
Be prepared by having these professionals lined up before placing and offer. These specialists should be “waiting in the wings” ready for their time to act on your behalf.
Victoria Boscariol is a real estate agent in Toronto Canada with Chestnut Park Real Estate Limited Brokerage. With over 20 years experience, Victoria has been helping people successfully buy and sell condos and houses in Yorkville and downtown Toronto. As a Certified International Property Specialist (CIPS) she has worked with Buyers from around the world moving to Toronto from China, Russia, Brazil, India, South Africa, United Arab Emirates, Jordan, Cyprus, Italy, Germany, The United Kingdom, Australia and the United States.