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Are you thinking of buying property overseas as an investment? Or, are you a foreigner looking to purchase some land or a home in Canada? Our guide covers what you need to know about buying property overseas or in Canada, including some of the most frequently asked questions about investing in foreign property.
Compared to other parts of the world, investing in Canadian property in certain cities and provinces is very expensive, where property values and rents have hit an all time high in recent years. This is why Canadians are now looking for cheaper alternatives overseas in other countries like the United States, Mexico and Greece.
When purchasing property overseas, there are important considerations that you’ll need to take into account including:
If you can’t raise the full amount required to purchase property overseas, you’ll need to find a way to finance your investment. There are financing institutions in Canada that have branches or business partners in foreign countries worldwide, which you may be able to rely on for a financial solution. Most of them will even be able to assist you in filling out the required paperwork and making the necessary transactions.
Again, the Internet has a wealth of information regarding financial options in specific countries. If you can’t find what you’re looking for, it may be worthwhile to reach out to a broker or a financial expert in order to receive more guidance when looking to invest in property overseas.
When transferring money overseas, you have a few options including:
The total amount that you’ll end up spending when investing in overseas property will be greatly affected by the exchange rates. Exchange rates vary and fluctuate constantly, so it’s better for you to purchase an overseas property when the rates are favourable.
Remember that the fluctuating exchange rate will also affect any income that you’ll receive if you rent out your property, and you may find your income varying from one year to the next. You may want to consider a specialist money transfer company to help you get the best rates and lowest fees for sending your money between the country where you’re investing and Canada.
The Government of Canada regulates foreign investment in the housing sector relatively heavily, since the value of land and houses has skyrocketed in the past few years. Foreigners can generally get approval for vacant land and existing residences for redevelopment as long as they apply for approval in advance and in the correct manner.
While lenders will allow you to borrow money as a non-Canadian resident, your down-payment on the property will need to be significantly larger than if you were a Canadian buying the property. You’ll usually need to have a 35% cash down-payment. In addition, mortgage rates are normally significantly higher than those a Canadian resident would be offered.
It’s relatively easy to purchase property or land in Canada as a non-resident. Important things to consider include:
Remember that buying land or property in Canada will not result in your becoming a Canadian citizen.
Since you’ll typically need a 35% down-payment for your land or property, you must figure out how to transfer your money overseas to Canada. You generally have two options:
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