Canada’s real estate market remains one of the strongest in Europe and North America. Investing in property in Canada especially the province of Quebec can be profitable if you understand some of the dynamics of doing business here. One of the most significant advantages of investing in property in Canada is that there are no citizenship or residency
requirements for owning property in Canada.
You can own a Canadian residence on a permanent basis as long as you comply with all the immigrant requirements. Non-residents can own property and will only be required to file their annual tax returns with the Canadian Revenue Agency. We have compiled a quick guide for anyone who is looking forward to investing in property in Canada to make things easier. Don’t forget to contact a Montreal real estate broker who will guide you through the Montreal, Quebec real estate market.
You will be required to pay a Quebec provincial transfer tax when you purchase a property in Quebec, Canada. The transfer tax is usually one percent on the first $200,000 and two percent on the remaining amount. However, some exemptions may apply if you are purchasing your first home in Canada. You will also be required to pay annual property taxes that are based on the assessed value of your property.
Montreal is a good city if you are looking for rental returns since an apartment in Montreal is most likely going to earn you a gross rental return of over five percent. It’s also a good recreational city in Canada’s province of Quebec. During your visit to the city you can be driven around in a limousine to discover the exciting features of the City and the area you are interested to invest in.
Various Canadian lenders are always willing to finance property purchases of non-residents but will require slightly larger down payments. You may be required to pay a down payment of about 30 percent. Lenders will also verify your source of income and creditworthiness to establish that you will be able to pay the mortgage. Mortgage interest rates may also be slightly higher for non-residents compared to what Canadian residents pay, however, they are still
Taxes on Rental Property
The Canadian Income Tax Act dictates that 25 percent of the gross property rental income be remitted annually. However, non-residents can choose to pay 25 percent of the net income by filling the NR6 form. You can even previously paid taxes if your property incurs significant net losses. Your income will also be treated differently depending on whether it’s considered a business or rental income.