Покупка, финансирование и налогообложение недвижимости для иностранцев
Ипотечная азбука
We often work with international clients, and for this category of buyers it is especially important to understand that purchasing real estate in Canada today requires far more careful preparation than it once did. Non-residents and foreign buyers face special rules, restrictions, taxes, lender requirements and CRA procedures. A mistake at any stage — from choosing the property to transferring funds and filing tax documents — can become very expensive. The main principle is simple: legal and financial review first, offer to purchase second.
If you want to buy real estate in Canada, it is not enough simply to have the required down payment. You must understand whether you are legally allowed to purchase that specific type of property in that specific location, whether the federal prohibition on purchases by non-Canadians applies to you, whether you are subject to Ontario’s Non-Resident Speculation Tax, whether you can qualify for a mortgage, and what tax consequences may arise if you rent out the property or sell it later.
Below are the main questions international buyers most often ask. If your situation is not standard, it is best to receive individual advice before signing an Agreement of Purchase and Sale.
Who buys real estate in Canada
Foreign buyers can generally be divided into several categories.
1. Buyers planning to become permanent residents of Canada. If you or members of your family are planning immigration, study, work or permanent residence, it is important to clarify your status and your rights to purchase real estate in advance. Consult an immigration professional and check the current rules on the official Government of Canada website.
2. Foreign investors. For this category, taxes, ownership structure, rental income, rules for selling property, estate planning and possible tax consequences both in Canada and in the buyer’s country of tax residence are especially important. Before purchasing, it is wise to consult a Canadian accountant, a lawyer and a tax professional in your own country.
3. Buyers purchasing a vacation home or second property. If you or your family members plan to stay in the property periodically, you need to consider not only the mortgage and closing costs, but also restrictions on purchasing residential property, rules for staying in Canada, insurance, property maintenance, taxes and possible rental income during periods when you are not using the property yourself.
Can foreigners buy real estate in Canada?
The answer is no longer as simple as it used to be. Canada has a federal prohibition on the purchase of certain residential property by non-Canadians, extended until January 1, 2027. It applies to many residential properties located in Census Metropolitan Areas and Census Agglomerations, including major urban markets. Residential property usually includes detached houses, semi-detached homes, townhouses, condominium units and buildings with up to three dwelling units.
There are, however, exceptions. These may apply to Canadian citizens, permanent residents, certain temporary residents, protected persons, buyers of certain types of property, properties outside covered areas and other situations provided for by law. Each case must therefore be reviewed separately. A foreign buyer should never assume they can purchase any house or condo in Canada simply because they have the funds or a mortgage approval.
Ontario also has a Non-Resident Speculation Tax, an additional tax for certain foreign buyers of residential property. At the time of writing, the NRST rate is 25% and applies on top of the regular Land Transfer Tax. In Toronto, additional municipal rules and taxes may also apply. For a buyer, this can dramatically change the transaction budget, so the NRST issue must be discussed with a lawyer before submitting an offer.
Can foreigners qualify for a Canadian mortgage?
Yes, in some cases foreign buyers can obtain a mortgage in Canada, provided the purchase itself is permitted by law and the lender is willing to review the application. Lenders usually require a higher down payment, often around 35% of the purchase price or appraised value. In some cases, the bank may require more, especially if income, assets, credit history or the source of funds are difficult to verify.
The approval process is individual. The bank or mortgage broker will review the buyer’s citizenship and status, source of down payment, proof of assets, income, debts, employment, credit history, country of origin of funds, purpose of the property and type of property. In some cases, foreign buyers may be offered rates close to those available to Canadian residents, but this is not guaranteed and depends on the lender, documentation and client profile.
A fixed or variable mortgage rate may be available if the lender offers both options. The maximum amortization period is often 25–30 years, but specific terms depend on the program, property type and buyer status. Payments are usually withdrawn from a Canadian bank account, which makes having a bank account in Canada practically necessary.
Documents the bank may require
The document list can vary depending on the lender, but foreign buyers are often asked to prepare:
- proof of down payment and source of funds
- bank statements
- funds for closing costs and reserves
- a reference letter from a bank in the country of residence
- proof of income or an employment letter
- tax returns or other income documents, where applicable
- two pieces of identification, including one showing a foreign address
- purchase agreement
- bank-approved appraisal
- documents showing assets and liabilities
- explanation of the purpose of purchase: personal use, rental, investment, relocation or vacation home
In many cases, the bank also wants to see additional funds in a Canadian account, for example enough to cover several months of mortgage payments, property tax, condo fees and other expenses. For investment properties, requirements may be stricter.
Buyers with a work permit and employment in Canada
Separate programs may be available to clients who have a work permit, live in Canada, have full-time employment and can prove their income. In such cases, down payment requirements may be lower than for a classic foreign buyer, but everything depends on status, length of stay, visa type, credit history, income and the rules of the specific lender.
It is important not to confuse mortgage qualification with the legal right to purchase. Even if a bank is willing to consider financing, the lawyer must still verify whether the purchase is allowed under the federal prohibition and whether the NRST or another additional tax applies.
Payment methods and transfer of funds
To purchase real estate in Canada, it is usually necessary to open an account with a Canadian financial institution. Funds for the down payment, closing costs and future mortgage payments are transferred through this account. Funds required for closing are often provided in the form of a certified cheque, bank draft or wire transfer in Canadian dollars.
Because exchange rates depend on the bank, amount and date of the transaction, this must be planned in advance. A large transfer should never be left until the last day. A delayed international wire transfer, compliance check, currency conversion or source-of-funds review can disrupt closing and create serious financial consequences.
Closing the transaction
It is very important to close the transaction on the scheduled date. If the buyer does not provide funds on time, the seller may have the right to seek remedies under the agreement, including retaining the deposit, claiming additional expenses, interest, damages or even cancelling the transaction. In Canadian practice, missing the closing date is not a formality; it is a serious risk.
The Canadian lawyer representing the buyer must have enough time to prepare mortgage documents, title search, registration, insurance confirmation and all lender requirements. If the buyer is outside Canada, the signing process must be discussed in advance with the lawyer, the bank and the lender. Some documents may be signed remotely, but not all lenders accept a power of attorney, and requirements vary.
The best approach is to plan the process well in advance, especially if the buyer will not be in Canada around the closing date. Identification, notarization, courier delivery, embassy or consulate verification and lender requirements cannot be left to the last minute.
Closing costs
In addition to the down payment, the buyer must account for closing costs. In Ontario, these may include Land Transfer Tax, Toronto Municipal Land Transfer Tax when buying in Toronto, legal fees, title insurance, appraisal, home inspection, adjustments, registration fees, mortgage-related costs, HST on new construction where applicable, and the NRST if the buyer is subject to it.
The old rough estimate of closing costs at 1.5% of the purchase price is no longer always realistic, especially for foreign buyers. If the NRST applies, costs can be much higher. A precise calculation should therefore be prepared in advance with a lawyer and mortgage professional.
Canadian tax on rental income
If a non-resident receives rental income from property in Canada, that income is taxable in Canada. In general, the payer or agent must withhold and remit to the CRA 25% of the gross rental income. This withholding tax is often higher than the actual tax that would be payable after expenses.
A non-resident may choose to make a Section 216 election and file a Canadian tax return in order to pay tax on net rental income rather than gross income. In some cases, Form NR6 can be filed in advance so that, after CRA approval, tax is withheld on net rental income. These issues should be discussed with a professional accountant, because deadlines and proper filing matter.
What happens when a non-resident sells property
If a non-resident sells real estate in Canada, CRA rules for taxable Canadian property must be considered. The seller must apply for a Certificate of Compliance, usually through Form T2062. If this process is not handled properly, the buyer or lawyer may be required to withhold a significant portion of the proceeds until CRA clearance is obtained.
A non-resident should gather documents in advance to prove the adjusted cost base of the property, purchase documents, closing costs, legal fees, major improvements, renovations, invoices, capital expenses and other costs that may affect the capital gain calculation. Without these documents, the seller may overpay tax or face delays in receiving sale proceeds.
The Certificate of Compliance request should ideally be prepared before the closing date of the sale, once the terms of the transaction are known. The process can take time, so if the seller needs sale proceeds to repay a loan, buy another property or meet other obligations, this delay should be planned for in advance.
Documents worth keeping
A foreign owner of Canadian real estate should keep documents from the first day of ownership:
- Agreement of Purchase and Sale
- closing statement
- mortgage documents
- legal invoices
- land transfer tax statements
- appraisal reports
- invoices for renovations and major improvements
- condo status certificates, if applicable
- rental income records
- property management statements
- insurance documents
- property tax bills
- CRA filings and notices
If the property is rented out, a non-resident should ideally work every year with a Canadian accountant who understands non-resident rental income, Section 216, NR6, capital gains and the sale of taxable Canadian property.
A professional team makes all the difference
Buying real estate in Canada as an international client is not only a matter of choosing a good house or condo. It is a legal, tax, banking and organizational process. You need to confirm the right to purchase, calculate taxes, obtain mortgage approval, arrange the transfer of funds, prepare closing, properly report rental income and understand the future sale process in advance.
Our team of experienced professionals includes mortgage professionals, lawyers, bankers and professional accountants who help clients move through this process correctly and calmly. If you are considering Canadian real estate as a future home, investment, vacation property or first step toward relocation, we will be happy to help you evaluate your options and avoid costly mistakes.
Mortgage Legko