Tips for real estate investment in Canada

Monday Mar 23rd, 2020


When you are looking for safer investments, people tend to shift to harder assets like gold, especially when the stock markets are in turmoil, like right now. Another less volatile sector for investments is the real estate, especially in a country like Canada where there are more options to tap into.

In this article we will try to provide you with some pointers that will help you to go forward in your investments in real estate in Canada.

Real estate Investment in Canada – Some tips

If you are a newbie in the real estate market then the investment into this sector, especially in a foreign market, might look daunting. But if you have the right tips, it will help you to jump into the foray without any inhibitions.

Choosing the right city

When it comes to investments into real estate by foreign parties, there are multiple regulations which govern them in Canada, where most of them are specific to a province. In order to make your investments profitable, you need to choose a city which has favorable conditions in both legal and taxation grounds. For instance Toronto does not impose foreign buyers’ tax while Vancouver has taxes imposed for any sale of property to foreign buyers.

Income potential of the city

The major reason for buying real estate is for income and that is why you have to gauge the income potential in the city you want to invest in. If it is not a primary residence for you then you should choose a city where there are options for a better rental income like a city with many tourist attractions that will serve the purpose.

Options for financing

The financing options are endless when you are buying a property in Canada. You can avail the loans from the Canadian banks and if you are a US citizen, you can also avail the same from the US. You can weigh the pros and cons of the loans from the different financial institutions in both the countries and choose the one that is more favorable to you. Of course the type of mortgage loan you opt for can also have an impact on your costs. You can avail cheaper mortgage with a buy to let mortgage loan.

Tax and revenues

Since the IRS (US tax service) and the CRA (tax agency of Canada) work hand in hand, you need to keep the tax returns in order. The best feature is that depending on how you set up your investment and financing, you can choose to claim the foreign tax credits. There are many different service providers and agents to help you file the taxes on time for both countries.

Another factor you need to bear in mind is that when buying a real estate in Canada, the buyer or the investor has to bear the closing costs like home inspection cost, legal fees, taxes, etc. Despite all these factors real estate investment in Canada can be quite a profitable venture for anyone and is not as daunting as it sounds either.

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