Please enter your username and password here:Forgot Password?
Please enter your details here:or Login
Canada has a long tradition of welcoming foreign capital. There are no foreign investment restrictions on property investment unless you intend to buy farmland.
As property rights are strongly protected, Canadian property investment may be a very attractive option for many expatriates. In addition, round-trip property transaction costs are moderately low by international standards (around 7%).
Don’t underestimate the potential for natural disasters though, and check the possible risks in your local area. It might be necessary to have a separate insurance policy if you live in a high risk area. See Insurance for Expats in Canada.
Canadian housing market generally
Canada’s housing market is commonly monitored through the Teranet House Price Index (HPI). Canadian property prices are very high and they have more than doubled over the past 15 years. The most expensive cities are Vancouver ($7,500 per sqm) and Toronto ($6,000 per sqm).
There is little evidence that Canada has encouraged a house price bubble. In fact, Canadian policymakers repeatedly take measures in order to cool down the market, although they’re not radical. Canadian property prices are strongly supported by high/rising rents as well as low interest rates, and – in the case of Vancouver – low property taxes.
Strong demographics and better housing standards have justified persistently rising rents in real terms since World War II. For so long as these fundamentals don’t really change, rents are supposed to keep going up over the long-term, along with home prices.
An assessment of the Canadian housing market must include many other macroeconomic factors, including:
Get your documentation right before applying for a mortgage, and do it early to avoid disappointment.
From a financial point of view, remember that:
For more information on Canadian mortgages, see ACCOMMODATION – Mortgages for Expats in Canada.
Land value taxes may be levied by municipalities. They are roughly assessed on the property’s rental value. Tax rates can range from 0.6% to 2.5%.
Higher property taxes mechanically shrink property values and rental yields. Prior to purchasing property, it is essential that you check how much property taxes you can expect to pay.
Letting your property
Canadian property prices are sometimes crazily expensive, but they’re not overpriced. This is because rents are also sky-high while interest rates are low. Consequently, rental yields are still fair.
In a high-tax town, such as Winnipeg, gross rental yields may exceed 6%. In a low-tax town, such as Vancouver, don’t expect your gross rental yield to be over 4.5%.
Rents may rise further in the future, not only because of inflation but also because of a supply of higher quality homes.
Do check the applicable landlord and tenant law prior to leasing property. The rules may be different from one province to another. Do not attempt to evict a tenant illegally, as illegal eviction may be a criminal offence.
From a financial point of view, the return on property investment comprises of:
If rents are to rise (e.g. because of inflation), you are more likely to make capital gains over the long run, i.e. without taking into account medium-term fluctuations, such as mortgage availability.
Rental income received by an individual is generally taxed at the progressive rates of income tax. Capital gains are taxed only on 50% of your net gains.
Mortgage interest is not tax-deductible, unless it is part of a buy-to-let arrangement. This is compensated by an exemption for capital gains on the sale of your principal residence.
For more information on tax in Canada, see TAXATION – Investment Taxation for Expats in Canada.
Sections in FINANCIAL CONSIDERATIONS IN CANADA:
» Money Transfers for Expats in Canada
» Foreign Exchange for Expats in Canada
» Banking for Expats in Canada
» Pensions for Expats in Canada
» Investment for Expats in Canada
» Wealth Management for Expats in Canada
» Property Investment for Expats in Canada
» Insurance for Expats in Canada
We value input from our readers. If you spot an error on this page or have any suggestions, please let us know.
If you are considering moving to Canada or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Canadian section including; details of immigration and visas, Canadian forums, Canadian event listings and service providers in Canada.
From your safety to shopping, living in Canada can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in Canada with relevant news and up-to-date information.
Working in Canada can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Canada, and general Canadian culture of the labour market.
About | Useful Links | Global Media Partners | Media | Advertising And Sales | Banners And Widgets | Glossary | RSS | Privacy & Cookies | Terms And Conditions | Editorial Policy | Refer To A Friend | Newsletters | Contact | Site Map
Important Notice: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. © Wolters Kluwer TAA Ltd 2017. All rights reserved.
The Expat Briefing brand is owned and operated by Wolters Kluwer TAA Limited.