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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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 Posted: Thu Feb 22, 2007 5:45 pm Post subject: Question about Buying Property in Canada |
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| I'm considering buying a house and putting renters in it back in Canada. Has anyone bought a house in Canada while living abroad? I know if I don't live in the house, so maintain a third-party arrangement, then the gov't can still consider me a non-resident, but it's the buying the property I'm wondering about. Did the banks need you to declare you were a resident of Canada in order to give you a mortgage? Any info would be appreciated, thanks. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Fri Feb 23, 2007 7:44 am Post subject: |
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| One more try. Has anyone purchased a property in Canada while living overseas and rented it out? Any info, even basic, would be appreciated. |
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Gideon
Joined: 24 Feb 2004
Location: Seoul
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| Posted: Fri Feb 23, 2007 7:59 am Post subject: |
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My friend tried to purchase a house, but the bank would not give him a loan because he lived and worked outside of canada. Even though he offered to show all is employment records the bank still said no.
Good luck.. um sure there is a way to do it. |
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Lizzie
Joined: 20 Feb 2006
Location: Vancouver Island
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| Posted: Fri Feb 23, 2007 4:20 pm Post subject: I looked into this too |
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| I also looked into buying a house in Canada and renting it while I was living/working in Korea. What I found out was this: You can do it but the government takes 25% of your rental income. I do believe you would not be able to declare yourself as a non-resident for tax purposes because property in Canada is considered a primary tie to that country. On the other hand I read some time ago, somewhere about someone who did the 'property purchase/rental thing' and he seemed to be pretty satisfied with his dividends. Sorry I know that is vague-but it was what made me investigate the situation for myself. If I can find the site about out of country property owners I will post it for you on this thread. |
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blaseblasphemener
Joined: 01 Jun 2006
Location: There's a voice, keeps on calling me, down the road, that's where I'll always be
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| Posted: Fri Feb 23, 2007 4:29 pm Post subject: |
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Lizzie,
I went to the Revenue Canada website, and it said that if you own a rental property and don't live there, it will not render you a "resident". The problem is in the purchase of the house. It seems that some banks, maybe all, will not lend to a non-resident, even with 25-35% downpayment. I hadn't read anything about the tax implications either. If you have find a link to that, let me know.
Still wondering about banks lending to non-residents. |
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Hanson
Joined: 20 Oct 2004
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| Posted: Fri Feb 23, 2007 4:52 pm Post subject: |
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I started a thread on a related topic here :
http://www.eslcafe.com/forums/korea/viewtopic.php?t=78193&postdays=0&postorder=asc&start=0
In it, a poster wrote this:
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I invested in a few different places (diversified portfolio) and in realestate here and home. We own our apartment here and a property in Canada. The property in Canada is rented out and will be paid off in a couple of years as we put it on a 10 year morgage *thereby saving heaps on interest*.
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So, it is possible.
Lizzie:
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| I also looked into buying a house in Canada and renting it while I was living/working in Korea. What I found out was this: You can do it but the government takes 25% of your rental income. I do believe you would not be able to declare yourself as a non-resident for tax purposes because property in Canada is considered a primary tie to that country. On the other hand I read some time ago, somewhere about someone who did the 'property purchase/rental thing' and he seemed to be pretty satisfied with his dividends. Sorry I know that is vague-but it was what made me investigate the situation for myself. If I can find the site about out of country property owners I will post it for you on this thread. |
This is where my interest lies as well. I'm worried about buying a property in Canada and being subject to income tax on my earnings here, since owning property is considered a primary tie, and therefore, you would be considered a resident.
However, I did find this info: http://www.mymortgagebc.com/have-questions/non-resident-purchasing-a-home-in-canada
where they say:
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Non-Residents and Canadian Property Purchasing - What you need to knowRules & Taxes
Contrary to what many are lead to believe, there are neither restrictions to purchase real estate in Canada, nor are there extra fees or tax implications payable at the time of purchase/closing. In fact, a non-resident may purchase as many properties as they so desire. The only tax implication would be when a non-resident rents out their Canadian property. In this case, they would need to file a Canadian Tax return declaring the rent as income, which would be a straight forward process.
Mortgages
Most lenders require non-residents to have a down payment of approximately 35-50% of the purchase price. In order to make the mortgage payments, a borrower must open a Canadian bank account from which the payments can be drawn. Qualifying for a Canadian mortgage is generally straight-forward, and would generally include an interview by phone, fax or email to discuss employment, assets and liabilities, employment and income. You will also need to provide copies of identification, and you may be asked to have this information notarized by a lawyer if you are unable to meet the lender in person. Non-residents may also be asked for a letter from their bank in their country of residence. It normally takes a between 1 to 5 days for approval depending on your particular circumstance.
Legal Info
A non-resident purchaser will need the services of a Canadian lawyer or notary to assist with transferring the title through the Land Titles Office and to prepare mortgage documents. When a Non-resident sells their property any gains received on a property will be subject to income tax.
I provide many options for non-residents wishing to purchase a home and obtain a mortgage in Canada. Give Brent Irving a call at 604-764-6336 to discuss your mortgage options.
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If anyone has any more info, I'd love to hear about it, too! |
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Lizzie
Joined: 20 Feb 2006
Location: Vancouver Island
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| Posted: Fri Feb 23, 2007 5:08 pm Post subject: This is what I found |
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http://www.landlord.net/nonresident.htm
So if you want to be deemed a non-resident for personal income tax you get dinged for 25% of your rental income. If you want to get dinged for our regular taxes in Canada the you can be a resident landlord with primary ties. Although this site is mainly geared for foreign investors-maybe it will help answer some questions. If it is completely useless-sorry. If I see anything else I will send it your way.
3/4 of the money I make this year in Korea pays for my student loan. Next year all of my money is going for a down payment on a house-you can do it too. In 7 months I have saved $14,000.00 Canadian no problem-and I do not make much money (2 million won) as it is my first time in Korea. I am from Vancouver Island-well not originally, but it has been home for a long time-well, now I am looking at property on PEI. Why? PEI is the only other climate in Canada I think I can deal with and the property prices rock. If everyone is moving West-move East, I say. |
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Lizzie
Joined: 20 Feb 2006
Location: Vancouver Island
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| Posted: Fri Feb 23, 2007 5:12 pm Post subject: PS |
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Thanks Hanson-good post.
Sorry it wasn't up before I replied again.  I am sure it is much more useful than what I posted and I really appreciate the info too. |
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IlIlNine
Joined: 15 Jun 2005
Location: Gunpo, Gyonggi, SoKo
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| Posted: Fri Feb 23, 2007 9:44 pm Post subject: Re: This is what I found |
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| Lizzie wrote: |
http://www.landlord.net/nonresident.htm
In 7 months I have saved $14,000.00 Canadian no problem-and I do not make much money (2 million won). |
What do you eat? Mountain shrubbery with a side order of mineral-rich yellow dust and uranium-enriched tap water? |
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Lizzie
Joined: 20 Feb 2006
Location: Vancouver Island
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| Posted: Fri Feb 23, 2007 10:28 pm Post subject: saving money |
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 I eat well, I smoke and I am drinking a Becks dark beer right now. Maybe the drinking and smoking cancels the eating well-but the topic is money, not health.
However, I live in Daegu not Seoul so perhaps life is cheaper here. I do not eat chicken, beef or pork-maybe that saves me money-just fruit, veggies and the odd bit of fish or eggs. Utilities are never above 100,000 won a month, no rent. I brought enough clothes for a year. Food, and household goods cost me another 100,000 won a month. I have a satisfying social life-go to movies, eat out with friends, etc. What else is there to spend money on?[/quote] |
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white tiger
Joined: 28 Jan 2003
Location: Seoul
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| Posted: Sat Feb 24, 2007 12:36 am Post subject: |
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Lizzie, you and i are in the exact same boat, i think.although i am planning on buying some rentals around uni areas in manitoba.
i hope everyone here continues to update their story with this. i wont be doing it for another 2 years, but would love to know how it works out for everyone. |
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