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Real Estate Investing & Home Purchase

Property prices in Canada are very affordable by international standards.  Toronto is considered to be the most active condominium market in North America. 

First time home buyers, real estate investors, developers and flippers continue to flock to Downtown Toronto. 

In Toronto, prime condo building prices start at $500 per square feet (resale condominiums) and go up to $800 per square foot (pre-construction/new builder luxury condominiums) and even higher for the best buildings – which may include projects such as the Four Seasons residences, One Bloor Street and The Trump Tower.

Toronto offers a safe real estate investment haven for international investors looking for a second or third home in North America’s most diversified city.  Downtown Toronto investment comes from both domestic as well as international investors; many come from countries such as India, Iran, Pakistan, UK, UAE, China and Russia.

Tenant protection laws are strong, somewhat pro tenant in Toronto.  However, the tenant selection and due diligence on part of the real estate agents can eliminate bad apples before entering into a tenancy contract.

What is the cost of living in Ontario?

Relative to Western Europe, UAE and other oil rich Middle Eastern countries the cost of living in Ontario is lower. It is about the same as the United States. International visitors are pleasantly surprised at the cost of fresh produce in this people friendly and multi-cultural Toronto city. 

Can I apply for permanent residency?

Yes, you can apply for permanent residency. There are a number of criteria to be met.  

Are there any restrictions on home ownership for non-residents?

No, there are no restrictions. As a non-resident you may own a home in Canada. Withholding tax is payable, however, on earned income (such as rent) or sale proceeds in accordance with the terms of the tax treaty between Canada and the respective non-resident country. 

As a non-resident can I work in Canada?

To work in Ontario you are required to have a Social Insurance Number (SIN). To find out more please visit the Government of Canada web site. 

What types of real estate investments do you offer?

We can help you with two types of residential real estate investments in Downtown Toronto:

•New Construction Condominiums that can be available in months or years from the date of purchase, 
•Resale property that is ready to move in investment property bought for the purpose of rental income. 

Some investors have the opportunity to enjoy a beautiful holiday home when the property is not occupied, while watching its value appreciate at a steady pace. Depending on the individual investor’s goals, each property can offer return on investment (ROI) and long term growth potential. 

What taxes are payable on the property purchase and at what rate?

Newly constructed homes are subject to Harmonized Services Tax (HST).

Land transfer tax and Toronto Land Transfer Tax (for Toronto City only) is also payable when buying property in Ontario. 

How much down payment do I need to pay?

As a non-resident of Canada, you can be asked to pay 35 percent or more of purchase price as down payment. Every bank has its own set of policies. It’s always prudent to speak to the lending institution and get pre-approved for mortgage. The balance of purchase price can be borrowed from financial institution against the mortgage of your property. The rate to borrow is same as any other Canadian or permanent resident. 

What other costs will I pay?

Apart for your monthly mortgage payments, you are liable to pay monthly condominium fees (approx. $0.50 cents per square feet, say for a 1000 sq ft apartment, you would pay $500.00 per month), property management costs; if you choose to, and your property taxes. Most of the utilities are included in your condominium fees, and/or are payable by tenants, if applicable. 

How much are annual property tax?

Municipal and school tax is based on a Mill Rate currently (2009) estimated at 0.8547 in Downtown. 

What taxes will I pay if I plan to sell my property?

If the property was used as a principal residence, the owners are exempt from payment of capital tax. If the owner is a non-resident, the sale proceeds will be subject to withholding tax. You should consult with your tax advisor and lawyer for exact details of these taxes. 

Can I lease my property?

Yes. You may opt to lease your condo to a qualified tenant; someone with good credit, job history and references, for one year or shorter term. 

What tax is levied on rental income?

Rental income is taxed under Canadian law. Rental expenses (condo fees, interest portion of mortgage, property taxes, property management fees, real estate fees, repairs etc.) can be reduced from your gross rental income. You should consult with a tax advisor for more information. 

How easy is it to repatriate any gains or income from the property?

Providing that any withholding tax and certificates are remitted to Revenue Canada there are no other requirements needed to satisfy the tax authorities. 

What are the tax implications if I buy a property in a company name?

A non-resident corporation must file a corporate income tax return with Revenue Canada if the corporation carried out business in Canada or disposed of a taxable Canadian property in the tax year. You should consult with a tax advisor and lawyer for exact details. 

Is there any legal protection for foreign investors?

Foreign investors are provided the same legal protection as any Canadian citizen. 

Do you know what the legal costs will amount to?

Legal costs to buy an investment property in Toronto including land transfer taxes, lawyer fees and other closing costs can amount to 3% to 5% of purchase price. 

How many days do I need to be in Toronto to buy an investment property?

 The process can be summed up in three easy steps. First is your mortgage approval (say 3-4 days) followed with transfer of funds, as per FINTRAC prevailing laws. Second step, is finding the property. Depending upon your investment goals and neighbourhood choice, it can take about one week to get you the right property. The last step, is meeting with a real estate lawyer, an accountant and a property management company. Your mortgage approval process (as above) can start even before your arrive in Canada.

Can I buy property in my child’s name, if he/she is an international student studying in Canada?

Yes, you can buy a property in your child’s name if he/ she is 18 years or older. You may also buy a property in joint names, subject to bank’s approval. If you/ your child is a permanent resident of Canada, you can qualify for first time buyer rebates, subject to other conditions.

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