Foreign Real Estate Purchasers In BC, Canada

Did you know that purchasing real estate in Canada as an investment is one of the safest and simplest ways to invest?

Island Ryan real estate team is specialized in dealing with out-of-town purchasers and investors from Canada. We make this process a smooth one that helps you profit. One way we do this is by offering video tours for potential properties for non-present and out of town investors. Another way we do this is by providing every possible detail regarding residency rates, provincial tax laws and purchase costs for you. Our real estate team offers total representation of all real estate dealings and can get the job done while you sit at home with your favorite beverage.

International Home Buyers & Foreign Investment into BC Real Estate

The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023.

Key Highlights

The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023.
The Act defines residential property as buildings with 3 homes or less, as well as parts of buildings like a semi-detached house or a condominium unit. The law does not prohibit the purchase of larger buildings with multiple units.
The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house.
Please note: This does not apply to non-Canadians who are looking to rent.

EXCEPTIONS

The Regulations provide exceptions to the following people.

Temporary residents studying in Canada, if they:

are enrolled in a program of authorized study at a designated learning institution as defined in the Immigration and Refugee Protection Regulations
have filed income tax returns for each of the 5 taxation years preceding the year in which the purchase was made
have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made
have not previously purchased a residential property in Canada while the prohibition is in effect
purchase a property for a price not exceeding $500,000

Temporary residents working in Canada, if they:

hold a valid work permit or are authorized to work in Canada
have worked full-time in Canada for at least 3 years within the 4 years preceding the year in which the purchase was made
have filed income tax returns for 3 of the 4 taxation years preceding the year in which the purchase was made
have not previously purchased a residential property in Canada while the prohibition is in effect

Refugees, if they:

have been given refugee protection or are a protected person under the Immigration and Refugee Protection Act, 2001

Refugee claimants and individuals fleeing international crises, if they:

have made a claim for refugee protection in accordance with the Immigration and Refugee Protection Act, if that claim has been found eligible and referred to the Refugee Protection Division; or
have received temporary resident status in accordance with the Immigration and Refugee Protection Act based on humanitarian public policy considerations to provide a haven to those fleeing conflict

Accredited members of foreign missions in Canada, if they:

hold a passport that has a valid diplomatic, consular, official, or special representative acceptance issued by the Chief of Protocol of Canada

Section 35 Rights – Indigenous People and Communities

The Regulations clarify that the prohibition doesn’t apply if it conflicts with the rights recognized and affirmed by Section 35 of the Constitution Act, 1982.

Section 35 recognizes and affirms the existing Indigenous and treaty rights of Indigenous peoples of Canada. These may include ownership rights to land, rights to occupy and use lands and resources, land to be set aside for First Nation use only, self-government rights and cultural and social rights.

Exceptions for certain types of property

The Regulations include an exception for any residential property found outside of a Census Metropolitan Area or Census Agglomeration as identified in Statistics Canada’s Standard Geographical Classification 2021.

Both Census Metropolitan Areas and Census Agglomerations are formed by 1 or more adjacent municipalities centered on a population centre, or the core.

A Census Metropolitan Area must have a total population of at least 100,000 of which 50,000 or more must live in the core and a Census Agglomeration must have a core population of at least 10,000.

Whether a residential property is located within a Census Metropolitan Area or a Census Agglomeration can be determined by accessing the Standard Geographical Classification (SGC) reference maps. More detailed maps of CMAs and certain CAs are also available by accessing Statistics Canada’s Census Tract reference maps.

Obtaining a Mortgage in Canada as a Non-Vancouver Island BC Resident

For a non-resident of Vancouver Island you will generally need a minimum of 10% of the purchase price for a down payment. Obtaining the mortgage may be effortless for some and more work for others, depending on your credit, financial status, the country you come from, how long the money has been in Canada and where the money came from. Canadian Mortgages can be obtained the same here as other places in the world and through the phone, fax, and email. Be prepared to provide personal information about your employment, income and assets. We have local Vancouver Island Mortgage Brokers prepared to work with out of town investors – simply complete our Contact Form and we’ll set you up. You should start transferring the money now if you are seriously considering the purchase as some banks can take 48 hours or more to properly transfer the money.

Documents and Identification Required to Buy a Home in BC

By Canadian Law you will need proof of identification at various steps throughout the buying process, whether you obtain a mortgage or purchase a piece of property with cash. To obtain a mortgage you will generally need some kind of proof of income via tax returns, or bank statements. A passport along with another government issued I.D. should be sufficient for I.D. needed.

For the purchase of the property and for the mortgage you will also need to fill out a FINTRAC form. If you are present at the time of the application or offer you can fill out the FINTRAC with the appropriate broker. If you are not present during the offer or application you will need to take the FINTRAC forms to an appropriate professional like a Lawyer or a Doctor. Its generally very easy to fill out and not expensive to complete.

International Property Selling for BC, Canada

As a non–resident property owner you are required to pay Canadian Taxes. In fact, a non-resident is required to pay an estimate of the tax before sale, which is an amount of 25% of the gain. The 25% is to be retained by the Seller’s Lawyer and held until there is a clearance certificate issued by the Canadian Revenue Agency (CRA) for the subject property. This clearance letter or certificate will not be issued until the sale of the subject property has reached the point of subject removal or all the conditions have been removed and before the buyer has taken legal possession of the property. The seller will not receive the full amount until after the contact of sale has completed and the title has transferred.

Any non-resident seller can file a Canadian income tax return for the year in which the sale occurs and can expect a refund for a portion of the taxes they had to pay in the sale. If the subject property was used for rental income, 25% will be charged in tax on the gross rent.

It is in your best interest to discuss these matters with your tax accountant. If needed we can provide the name of an accountant who can go over all of the details regarding all tax implications so that you are fully informed of your investment decision in Canadian real estate. Depending on what country you are from Canada may have a tax treaty with your country which exempts you from being taxed again from your homeland. This eliminates you from being taxed twice – both in Canada and in your home country.

Real Estate Taxes in British Columbia, Canada

The following is a basic outline of Real Estate taxes you can expect to pay in British Columbia:

Property Transfer Tax: 1% of the first $200,000 CDN & 2% on the remainder. If you are a first time home owner you are exempt from this tax. To qualify for the first-time owner tax exemption as a foreign investor you cannot have owned property from anywhere around the world and you must be a Permanent Resident of Canada or a Canadian Citizen, lived in the province of purchase for over 1 year, filed 2 Canadian Tax Returns within the last 6 years, and must immediately occupy the property for 1 year after purchase.
Luxury Tax: A tax of two per cent applied to the fair market value of a property transaction that exceeds $3-million. And that’s on top of an existing three per cent tax on the fair market value of a transaction above $2-million.
Clearance Certificate: Paid by the seller and can range from $300-$1,000 CDN depending on the complexity of the sale.
Capital Gains Tax: (Will not affect you if on your principle residence) Basic equation 50% of profits will be added to your annual income and taxed as personal income.
Good and Service Tax (GST): 5% GST is charge on newly constructed homes. New home buyers of homes under $350,000 can apply for a partial rebate of this tax as long as the home will be the purchaser’s primary residence. Homes between $350,000 and $450,000 CDN have a smaller rebate that can be applied for and no rebates are available over $450,000 CDN.
Property Tax: This is an annual fee levied with local communities. There are many different amounts of tax you may have to pay depending on the area. We can help you determine how much you will have to pay when viewing the homes you are interested in purchasing. Different homes in different areas will all have different taxes and will be taxed appropriately in correlation of the property’s assessment value.

Miscellaneous Fees on BC Real Estate

Realtors® Fees: If you purchasing a property there is absolutely no fee to obtain a Realtor.
Lawyer’s Fees: Lawyers in BC, Canada will review the offer of purchase, search the title, draw up the mortgage documents and tend to the closing dates. Typical Legal Fees for these services are between $500-$2000 CDN.
Home Inspection Fees: This protects you from purchasing a home with defects not found by the untrained eye. This typically will cost anywhere from $450-$800 CDN depending on the size and the condition of the home.
Strata Fees, Service Charges for utility hook ups
Property Insurance may also be applied to the total charges of purchasing your property.
Property Management:

Do You Want to Buy a Home in British Columbia Soon?

No matter what your goals are for purchasing property in this province, we’re dedicated to working hard for you and finding you what you want. We are educated and certified professionals with extensive experience in dealing from out of country purchasers. You can trust us to give you above ordinary service and professional work ethic in all and every dealings with us.

Ask us about our video tours we provide for our out of town non-present purchasers and investors!