\u00a0<\/span>As a non-resident you will need to follow certain rules, pay higher taxes than a non-Canadian permanent resident, and will need to put more money down than you usually would if you are financing the purchase of your property with a loan from a Canadian bank. But beyond these tax considerations which a competent Canadian accountant can help you figure out the tax implications and some paperwork. It should not be too challenging to do this on the Canadian end. However, on the U.S. end, there will be some tax considerations that you should discuss with a qualified accountant who has experience working with U.S. citizens who own property abroad and maybe an attorney who has experience with advising and working with U.S. citizens who own property abroad since there are two certainties in life, which are death and taxes.\u00a0<\/span><\/p>\n While this article is meant to answer questions about whether or not U.S. citizens and non-Canadian residents are able to buy property in Canada, you should treat this as a jumping-off point in your research into buying property in Canada. If you are serious about buying property in Canada, you should definitely contact a Canadian real estate agent or broker<\/a> who has experience working with foreigners who can assist and guide you through this process. It might also be worth finding a Canadian real estate attorney if you have any questions related to the legal, financial, and tax implications of owning property in Canada you should consult a Canadian accountant, Canadian lawyer, and a competent financial advisor. A Canadian accountant can also help you once you own property in Canada with filing and paying your Canadian taxes.<\/span><\/p>\n Related article:\u00a0The Ultimate Buyer\u2019s Guide for Buying a House in Toronto<\/a><\/span><\/p>\n First, buying property sadly <\/span>will not <\/span><\/i>improve your chances with Canadian immigration since owning property in Canada is <\/span>not <\/span><\/i>one of the factors that the Canadian immigration authorities take into consideration when they make decisions about immigration and visas. While owning property in Canada certainly will not hurt your chances if you are planning on immigrating to Canada and property ownership will be considered part of your overall net worth, this is a positive. However, owning a home in Canada does not impact the selection process. If you are interested in possibly immigrating to Canada, gaining permanent residency and one-day Canadian citizenship to join our northern neighbours, you should consider checking out the <\/span>Canadian Government\u2019s Citizenship and Immigration website<\/span><\/a>, where you can learn about the process and figure out your eligibility to immigrate to Canada.<\/span><\/p>\n \u00a0<\/span>Second, if you are planning on applying for a non-resident mortgage to finance your property purchase in Canada, you will have to put at least 20% of the purchase price as a down payment if you are a U.S. citizen and put at least a 35% down payment for the purchase price if you are not a U.S. citizen that are not gifted funds. It is important to remember that some banks might restrict the number of properties that they are willing to finance for each person. Some banks will only finance the purchase of up to five properties per person.\u00a0<\/span><\/p>\n Third, if you are looking to buy a residential property in the City of Toronto and certain areas in Toronto, that are considered to be a part of the Greater Golden Horseshoe Region (GGH) as a non-Canadian permanent resident or citizen or foreign entities (foreign corporations), trusts, and taxable trustees you will need to pay the <\/span>Non-Resident Speculation Tax (NRST)<\/span><\/a>. The Non-Resident Speculation Tax (NRST), which 15% of the value<\/a> of the consideration for the residential property. The NRST went into effect for all real estate purchases in the Greater Golden Horseshoe Region (GGH) beginning on 21 April 2017. The NRST is in addition to Ontario\u2019s Land Transfer Tax (LTT).<\/span><\/p>\n Related article:\u00a05 Common Mistakes to Avoid for a First Time Home Buyer in Toronto<\/a><\/span><\/p>\n The NRST applies for the value of the consideration for a residential property. This means that if the land being transferred includes residential property and another type of property such as agricultural, commercial or industrial property, the NRST will only apply for the portion of the value of the consideration that is attributable to the residential property. For example, if you are buying a house on commercial land and the house is valued at $500,000 and the property as a whole is valued at $1,500,000, you will only be paying the NRST for the $500,000 that is the value for the house.<\/span><\/p>\n In other words, you will be responsible for paying the NRST when this applies to the transfer of land which contains at least one and not more than single-family residences. Some of the examples of land that contain one single-family residence include land with a detached house, a semi-detached house, a townhouse or a condo. When there is a situation when a foreign entity is purchasing multiple condo units, each unit would be considered land containing one single-family residence. Land that contains more than one single-family residence includes land containing duplexes, triplexes, fourplexes, fiveplexes, and sixplexes.<\/span><\/p>\n However, you are not responsible for paying the NRST since it does not apply for other types of land including land which contains multi-residential rental apartment buildings with more than six units, agricultural land, commercial land, or industrial land.<\/span><\/p>\n Related article:\u00a0How to Find the Best Places to Live in Toronto?<\/a><\/span><\/p>\n These are the closing costs you should be prepared to pay when buying a home in Toronto<\/a> and the Greater Golden Horseshoe Region in Ontario. Please note that what you might end up paying with taxes and other costs might differ on where you are buying property, your unique circumstances, etc.<\/span><\/p>\n Related article:\u00a0How to invest wisely in Toronto\u2019s real estate?<\/span><\/a><\/p>\n If you are purchasing a home in Canada or outside of the United States to use as your primary residence you will be entitled to receive the same U.S. tax benefits as any other homeowner in the U.S. This means that you will be able to deduct the interest on your mortgage, your property taxes, and some other items on your U.S. tax filing documents. However, you must have a U.S. source of income or non-excluded foreign earned income which you can use for these deductions.<\/span><\/p>\n If all of your income qualifies and is excluded from U.S. taxes under the Foreign-Earned Income Exclusion (FEIE) and the Foreign Housing Exclusion you will have no income against which you can take this deduction. In order to be able to benefit from this tax deduction, your income must come from a U.S. source or income that is not excluded as part of the Foreign Earned Income Exclusion (FEIE). Also, this applies when you are making contributions to an IRA (Individual Retirement Account) or a Roth IRA. You need to have non-excluded earned income in order to be able to make IRA contributions even if are not taking a tax deduction.<\/span><\/p>\n If you decide to sell your primary residence overseas, you will luckily be able to benefit from the same exclusion on the capital gains tax that you would be if you were selling your home in the U.S. Your eligibility to benefit from the exclusion of the Capital Gains Tax is based on the following:<\/span><\/p>\n \u00a0<\/span>As a U.S. citizen and owner of foreign property that is your primary residence, you will be entitled to exclude the first $250,00 in Capital Gains, if you have used the property as your principal residence during two of the last five year before its sale.<\/p>\n However, it is important that any tax exclusions or benefits you receive under U.S. tax laws <\/span>do not mean<\/span><\/i> that you are not responsible for paying taxes in your country of residence. You might end up paying taxes or the gains even if you are able to exclude the gains on your U.S. taxes. You could also end up in a situation where you are responsible for paying taxes on the sale of your property in the country you are residing in and the U.S. In this situation, you might be able to claim a foreign tax credit and apply this against your U.S. taxes.<\/span><\/p>\n You should also keep a close eye on currency movements and exchange rates between Canadian Dollars (CAD) and U.S. Dollars (USD). Exchange rates and currency movements are important if you are purchasing and\/or selling property abroad. When you are purchasing your home abroad, you will need to calculate your property\u2019s value in USD using the relevant exchange rate on the day you purchase your property. When the time comes to sell your property, you will need to convert the value that your property sold for from CAD to USD using the exchange rate at the time of the sale. While exchange rates and currency movements impact a property\u2019s value and determine the taxes you will pay on it, currency movements also create gains and losses in relation to any foreign mortgages you may have used to finance your purchase of the property.<\/span><\/p>\n \u00a0<\/b>While this article is geared more towards individuals looking to buy homes in Canada, there are some people who purchase and own a property abroad using a corporation. This may sound odd to some people but it can make sense in certain cases.<\/span><\/p>\n \u00a0<\/span>In some countries, it is not uncommon for individuals to create corporations so they can purchase and own property while taking advantage of more favourable tax laws for corporations. In this scenario, the U.S. and local tax laws that govern the calculation of capital gains and the distribution of profits if and when the property is sold and the tax laws in this situation are totally different wherever you are located and in the U.S. Depending on the tax laws wherever you are located you might be paying less in taxes or a higher total tax owning a property as a corporation instead of owning a property as an individual. How much you will end up paying in taxes will depend on your specific situation.<\/span><\/p>\n \u00a0<\/span>As a U.S. citizen or permanent resident, having ownership in a foreign company means that you are required to file additional tax disclosure forms. If you own or control at least 10% or more of the ownership of voting shares, you might need to file a Form 5471: Information Return of U.S. Person with Respect to Certain Foreign Corporations. Also, if the corporate structure is solely created to hold the property, it might be classified by the IRS as a Passive Foreign Investment Corporation (PFIC), which means that you might be on the hook for paying more taxes.<\/span><\/p>\n \u00a0<\/span>If you are considering purchasing or owning property using a corporate structure or trust you should definitely consult a competent and experienced tax professional who has experience dealing with U.S. tax laws and in whatever country, where you are or will be residing.<\/span><\/p>\n Related article: Pros and Cons of Buying Homes in Downtown Toronto<\/a><\/span><\/p>\n![\"buying](\"https:\/\/justo.ca\/blog-admin\/wp-content\/uploads\/2021\/07\/buying-your-first-home.jpg\")
<\/p>\nThings non-Canadian citizens interested in buying property in Canada should be keeping in mind<\/b><\/h2>\n
![\"buying](\"https:\/\/justo.ca\/blog-admin\/wp-content\/uploads\/2022\/01\/sale-gb92527767_1920-1024x542.jpg\")
<\/p>\nThe Greater Golden Horseshoe in Ontario includes the following geographic areas:<\/b><\/h3>\n
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\u00a0<\/span>Closing costs you can expect to pay if you are buying a home in Toronto<\/b><\/h3>\n
![\"Toronto](\"https:\/\/justo.ca\/blog-admin\/wp-content\/uploads\/2022\/01\/Toronto-City.jpg\")
<\/p>\n\u00a0<\/span>Costs you will be responsible for paying before closing when buying property in Toronto<\/b><\/h3>\n
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\u00a0<\/span>Costs you will be responsible for paying upon closing on your property in Toronto<\/b><\/h3>\n
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Special considerations for U.S. citizens buying property in Canada<\/b><\/h2>\n
![\"U.S.](\"https:\/\/justo.ca\/blog-admin\/wp-content\/uploads\/2019\/07\/Downloader.la-624fc9c0108e0.jpg\")
<\/p>\nTax considerations for U.S. citizens with property abroad<\/b><\/h3>\n
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Exchange Rates, Currency Movements, and U.S. Taxes<\/b><\/h3>\n
Using a corporation to purchase and own a property abroad<\/b><\/h3>\n
![\"buy](\"https:\/\/justo.ca\/blog-admin\/wp-content\/uploads\/2019\/07\/family-or-matrimonial-home.jpg\")
<\/p>\nConclusion<\/b><\/h2>\n