Buying property in Canada

Who can buy in Canada

Foreign nationals can only buy residential property from 1 January 2027, due to the Prohibition on the Purchase of Residential Property by Non-Canadians Act passed in 2023.

However, certain buyers are exempt from these restrictions:

• Those purchasing a property with a spouse or common-law partner who is a Canadian citizen
• Those who have a work or study visa and are buying a property worth under $500,000 CAD
• Those buying property outside of the Census Metropolitan Areas and Census Agglomerations

The buying process in Canada

• When you’ve found the property you’d like to purchase, submit an offer to the estate agent.
• Once your offer has been accepted, you and the seller will sign the purchase agreement, a legally binding document that outlines the terms and conditions of the sale.
• It’s recommended that you appoint a lawyer to ensure all necessary checks are carried out before completion.
• If you’re buying a property with a mortgage, you’ll need a deposit of at least 5%. If your deposit is less than 20%, you’ll require mortgage default insurance.

Fees and taxes in Canada

Taxes for all buyers

All buyers are required to pay property transfer tax, which is based on a sliding scale determined by the property’s value:

• 1% on the first $200,000
• 2% from $200,001 to $2 million
• 3% from $2 million to $3 million
• 5% on amounts above $3 million

Upon completion, foreign nationals must pay a foreign buyer tax of 20% in British Columbia and 25% in Ontario.

Taxes for the City of Vancouver

• Vancouver has an empty homes tax, which is a 3% annual charge based on the property’s value each year.
• The tax doesn’t apply to those who permanently live in their homes or properties with long-term tenancy agreements for at least six months of the year.
• Owners must submit an empty homes tax declaration to the city authorities; otherwise the property will be deemed vacant.

Taxes for British Columbia

• A speculation and vacancy tax applies to most areas in the Metro Vancouver Regional District and surrounding areas.
• This rate is 0.5% for residents and Canadian citizens, and 2% for foreign nationals.
• Any exemptions must be reported annually to the authorities.