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The number of American , Asian and British people looking into Canada as the most likely location for their second home are currently on the rise. They are attracted by the country’s laid-back lifestyle, spectacular scenery, social and political stability. Also the ease with which they can come and go into Canada and the increasing number of low cost airlines covering travel here, add more to the bigger picture they see.
The fact that Canada’s global homes market is still young and developers are still seeking to attract foreign buyers thus strive to provide good value is another temptation to buy properties and establish here now.
Canada’s residential property market is performing adequately well in recent years, and is only affected by the global recession through its economy’s association with global markets. Making Canada’s residential property considerably cheaper than UK and USA, which, when lumped with the traditionally healthy capital appreciation of the Canadian dollar, makes it an attractive investment option for Americans and British considering to relocate permanently. Moreover prices of real estate properties in Canada are currently on the slide.
So if you are looking into buying properties in Milton , Mississauga , Oakville , Toronto , ON, Canada, we have some tips for you about Canadian Laws governing purchase of, investing in or leasing real estate properties by outsiders or non-permanent residents.
We hope this guide offers the best place to start. Other resources are also available if you want to research further; magazines, radio and television programs, the Web and property exhibitions provided by real estate agents in both the Canada and UK, and we participate in them too. This guide is not only for would be buyers but also for real estate agents that are not very familiar with real estate regulations in Canada.
Tip 1 – Look for the Prevalent Popular Locations
Over the years Canada has attracted its fair share of foreign American and British expats. Most of them when asked about the number 1 benchmark for their choice of location; travel time and cost are the ones most pointed out. But travel time will vary considerably subject on where in the UK you live.
Traditionally British buyers favor eastern Canada, due to its proximity to UK, for ease of travel. There are laws and requirements British citizens have to comply with even though they have relocated to another country, in connection with the status of their citizenship that will require travel back and forth to UK every quarter, semi-annual or once a year.
However, the western areas also come to be popular after the recent introduction of low-cost transatlantic services. Becoming popular also are the purpose-built resorts for retirees and persons with special needs.
Tip 2 – Know Rules and Regulations on Foreign Ownership
Buying a property or leasing them you have to know the ins and outs of regulations governing property purchase. These vary throughout Canada from province to province. When researching an area make it your business to know what is applicable here as a foreign buyer. There are no restrictions in New Brunswick, Newfoundland, British Columbia, Nova Scotia, Quebec and Ontario on foreign ownership. Ruled by a clause that requires foreign nationals to spend less than six months per year in Canada if they want to own a property here.
Be aware also that each province have different limits on the classification and volume of land that can be owned. You can consult with a developer when buying a new property, and prospective buyers are required by law to register first with a real estate agent (realtor) before negotiating for purchases.
Tip 3 – There are Acquisition Process that You Need to Familiarize
Anywhere in the world, real estate acquisition processes are all different for every country, and Canada has its own and is not the same as the UK or the US.
It is a rule for the majority of Canadian real estate agents (realtors) to pool their resources and cooperate in multiple listings. One realtor, a member of the group can typically access all available information on all open properties in an area. It is best to appoint a buyer’s agent (an independent realtor) the instant you have chosen a property to represent your interests.
The seller usually pays both the realtors involved with most real estate transactions in Canada. Your hired agent will draft the Offer to Purchase, which will be then submitted together with a refundable deposit, a guaranteed refund should the sale fail to push through. The sale can proceed once both vendor and buyer sign the offer and all of the pre-conditions are met.
Tip 4 – Know The Involved Costs
From province to province transactions costs in Canada vary. It is usually between 4.7 and 11 % of the total price of the property. This is what makes Canada attractive to buy properties in, the transaction cheaper fees. Provincial Sales Tax (PST) pegged to max of 8% and 5% Goods and Services Tax (GST) is usually incorporated in asking price of new homes except Alberta which does not levy PST.
8% provincial retail sales tax is combined with GST to form 13% Harmonized Sales Tax (HST) in Nova Scotia and New Brunswick including Newfoundland and Labrador.
There are certain conditions that can reduce GST and HST or avoid these two tax levy altogether. Real estate agents know all about these. While buying costs differ between provinces, allot max of $2, 000 for a survey, legal fees and insurance. There is also the 0.5% up to 2% purchase tax of the price.
Tip 5 – Know the Best Way to Finance Purchases
While you took all the obligatory initiative to research for the above conditions, it is also a smart move to work out the best way to finance your purchases. Consider all the options; cash payment, remortgaging your old home or you can arrange a mortgage on your Canadian property with a Canadian lender or a lender back in your old home country.
The easiest solution will be remortgaging. However for those who own their old home outright it’s best to free yourself of the yoke your old home imposes. Release equity in your old home and buy your Canada property for cash. So you will not need another mortgage. But, do you know there are UK mortgage providers that will lend you funds, max of up to 80% of the actual purchase price for any second home purchase with minimum of 30-year term.
Let Us Guide You Home
Professional and licensed real estate agents that are well-versed with all the technical difficulties, involved with purchase of real estate properties in Canada can help you iron out everything listed above. There are available online portals with which you can talk to them and initially explore your plans of relocating and leasing or buying a property in Canada, as a foreign national, if you have no time to come here just yet. Hire the services of real estate agents when you decide to make final arrangements of the sale. Having the same people handle everything from start to finish will provide consistency. Making the process stress-free because they know how to run through the process step by step without making costly mistakes.
BUY SELL INVEST IN PROPERTY PAT KAKAR & PAM Team