We have recently received many calls from Americans looking to buy property in Niagara Falls, Canada. Some investors are trying to take advantage of the low Canadian dollar when buying for the US dollar, while others are hoping to move to Canada to escape the current political climate (sorry …).
Buying real estate in Niagara Falls, Canada is very different from buying a house in the USA. Here's what you need to know:
Who is involved
When buying property in Canada, you usually work with the following people:
REALTOR's license – in most cases, one REALTOR represents the Buyer and the other the Seller
Home inspector
Intangible Property Lawyer – Unlike many states, buyers and sellers will need their lawyers, and lawyers will take all final action.
Lender – If it's not about buying everything, you need a bank loan. If you use a Canadian bank, most non-residents require a deposit of 35%, while residents can obtain a mortgage with a deposit of at least 5% of the purchase price (although this is up to 20% for investment property). Or those worth more than $ 1 million).
Insurance broker – If you do not live at home yourself, insurance can become more expensive.
Domestic hunting
The process of hunting a house
Here are three main ways you can find a home in Canada:
Unfortunately, we don't have Zillow or Trulia in Canada, but we have www.realtordurgesh.com. As an American, you may find the Canadian real estate search site somewhat outdated; properties about to enter the market are not mentioned; there is less public information than you would typically see due to privacy laws.
Automatic email search results: this is the most efficient way to search for real estate. A licensed REAL ESTATE can precisely perform a search for you according to your wishes/needs, and new offers containing these parameters will be sent to you every day. If you are looking for a Toronto agent, you can set up an excellent public version of the MLS so you can find the property yourself.
Personal: If you're planning to visit Canada, this is the best way to look for real estate (plus, it's an excellent opportunity to truly experience Canada!)
Through video: Many non-resident buyers choose video or Skype tours of the properties they are interested in. Sales price and dates
Canadians take their privacy very seriously, so you may be frustrated by the lack of data available to domestic hunters. Unlike most of the United States, Canada's sales prices and tax history are not publicly available or searchable. We don't have Zestimates. We do not know how much a loan a person may not be able to obtain costs. Your real estate agent can help you train for new sales, but you can't find this information online. Schools and neighborhoods
Canada has strict human rights legislation that prohibits discrimination in housing. Still, unlike most of the United States, REALTORS in Canada can provide demographic data, neighborhood information, and school quality comments. In all honesty, it strikes us that the United States holds this kind of information… It would not happen to a Canadian to link the quality of a school or the availability of discriminatory services. “Family neighborhood” means that it is a good neighborhood for families (and has nothing to do with explaining that individuals are not accepted). A “big school” implies nothing about the students' race, ethnic origin, or country of origin.
Terms and conditions
Canadian real estate offers often include financing and search terms, although these accidents usually occur within a few days. Once a buyer has conducted a house search or received a mortgage lender's approval, the sale of the property is “fixed” – meaning that you cannot return it for whatever reason.
In custody
We do not have any escrow companies in Canada; A real estate agent holds the deposit, and a lawyer provides the transfer of funds.
Money and taxes
CASH
At the time of writing, the Canadian dollar is much lower than the US dollar, which means that Americans have a real opportunity to take over Canadian real estate for a fraction of what Canadians pay. Here's a look at what has happened to our finances over the last five years:
July 2016 – $ 0.77 buys $ 1 Canadian
July 2015 – $ 0.77 bought $ 1 CDN
July 2014 – $ 0.93 for the purchase of 1 CDN in the US
July 2013 – $ 0.97 for the purchase of 1 CDN in the USA
July 2012 – $ 1 bought $ 1 CDN
For more information on economic opportunities, check out my blog last year: Toronto Real Estate Just Got Cheaper.
Finance
You can pay for your Canadian property in cash or get a mortgage through a Canadian bank. Canadian banks usually require a downpayment of 35% from a non-resident (which has to be in a Canadian bank for a certain period before it can be used to buy a property). Buyers also need a Canadian bank account (which they have to come to Canada to open), credit references, and an income that can pay the mortgage. While much of the financing process is similar to what you do in the US, Canadian banks tend to be more conservative and risk-averse. Click here to read about qualifying for a mortgage, Canadian interest rates, and downpayments.
Deposits
In Canada, like in the US, you must provide a deposit to the Seller within 24 hours of accepting an offer of purchase. In Toronto, average real estate deposits are up to 5% of the purchase price and become part of the deposit when the property is closed. But unlike many parts of the US, if you choose not to take out a mortgage, your mortgage is at risk, and the Seller can keep it.
Tax, tax, tax
You've probably heard that Canada is a tax country, and unfortunately, that's not a bad thing! If you are buying a property here, you must be willing to pay:
Land transfer taxes if you own real estate is a one-time tax payable to the region. If you are shopping in Toronto, you must pay a second land transfer tax (sorry). Check as a land transfer tax calculator here.
Municipal Property Taxes every year vary by city, but an owner of a property in Toronto that is assessed at $1 million would pay around $6,800 in taxes in 2016.
Capital Gain Taxes when you sell – In most cases, non-residents are subject to tax on any income or gains resulting from Canadian taxable property, including residential homes, condos, vacation properties, or land. When a non-Canadian resident sells a property, the Buyer of the property must withhold and remit a portion of the purchase price to the Canada Revenue Agency (CRA). Generally, this amount is 25% of the gross selling price. (Note that the actual tax owing may be different, this is to make sure the government will get its money by stopping the money from leaving the country until they can determine what is owing.) You'll want to make sure you get advice from an accountant before you buy a Canadian property – there are likely taxes owing to the US government.
Legal Stuff
The Canadian closing process is quite different from America, but you'll have a lawyer working on your behalf to make sure it goes smoothly. Closing costs
Unlike many parts of the US, the Seller cannot pay the cost of closing the Buyer, so you need to be prepared. Closing costs here usually include:
Purchase price balance – the purchase price below your initial deposit. Usually, most of your creditors will come and become your debtor.
Legal fees – the amount will vary depending on the purchase price and attorney (approximately $ 1,800 for a $ 500,000 purchase in Toronto)
Title Insurance – Sometimes Included in Your Legal Fee ($ 250 – $ 400)
Mortgage brokerage commission – if possible, it is usually paid by the lender
Property Survey – If Needed ($ 1,000 – $ 2,000)
Ontario Land Transfer Tax – varies depending on the purchase price (see our land transfer calculator)
Toronto Land Transfer Tax (varies by the purchase price (see our land transfer calculator))
Real estate tax adjustment: The Seller will pay the real estate tax that he spent after the closing date.
Hubble usually only applies to newly built apartments and houses
Tarion fee guarantee Tarion guarantee only for newly built apartments and houses that are not resold (click here for Tarion fee estimate)
Provincial sales tax – applies only to roses purchased from sellers (amounts vary)
Adaptation for utilities / apartment fees / etc. Payment to the Seller for prepaid services, etc. (amounts vary
Real estate market
Because the Canadian and US real estate markets have had different experiences over the past ten years (the Canadian recession in 2008 lasted about six months). We have no REOs, short sales, or foreclosures. Canada. Today's real estate market in Canada is much more robust, and you are more likely to experience a bidding war than to find a “deal.” You want to work with a local real estate agent who can help you balance the risks and opportunities of owning property in their community.
Citizenship and residence
Although anyone can buy homes in Niagara Falls Canada, the property does not give you residence or immigration rights. And no, just wanting to move to Canada doesn't mean you can! Like the United States, we have a strict process that we must follow if we're going to immigrate to Canada, and it is not as easy as most people think.
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