Need to Know Guide for Foreign Buyers of Toronto Real Estate

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Buying a home in Canada is a great investment. The economy is booming and the real estate market is going strong as the city and suburbs continue to grow.

While buying a home as a foreign investor is an exciting venture, it does require some research and understanding of what buying property in Canada entails. Here are a few things you need to know if you are looking to buying property in Canada as a non-resident.

1.       Find a good Realtor

The number one step when buying property as a non-resident is working with a Realtor who understands the ins and outs of the property laws, taxes, and process. Buying property for non-residents isn’t as cut and dry as the Canadian homebuyer process, so you want to have an expert on your side helping along the way.

Having a Realtor by your side allows you to gain insider insights into the locations and properties you are interested in, especially is you aren’t able to make a trip to Canada before your purchase. Your Realtor will help provide guidance and expertise as to what area you will want to buy depending on your financial and lifestyle goals, as well as the knowledge to understand the market, what to offer, and how to navigate the closing process.

2.       Secure Financing and Understand Taxes

 Canadian lenders will finance the purchases of non-residents, but they require more of a down payment than Canadian buyers. While every lender is different, often time non-residents are required to have a 35% down payment. You will need to show proof of income as well as past credit history from the country which you reside.  

As of 2017, the Ontario Government created a Non-Resident Speculation Tax of 15%. This tax on the purchase price and is paid on closing. It includes for properties purchased in much of Ontario and especially properties within the Greater Toronto Area. While there are exceptions to foreign nationals who become a permanent resident of Canada within four years of purchase, International Students enrolled full-time for two years form the date of purchase, and foreign nationals who have legally worked in Ontario for a continuous one year period since date of purchase, it should be expected that the 15% tax applies. Your Realtor will be able to explain all outlined closing costs so there won’t be any surprises.

3.       Research Home Insurance Options

You will require home insurance for your house, and prices and rates vary by lender. Your Realtor should be able to provide recommendations for home insurance providers. It is a good idea to shop around for coverage and a quote that best suit your needs.

4.       Find a Real Estate Lawyer

Your Realtor can put you in touch with a Real Estate Lawyer to read through and finalize the closing for you. You will likely want to get a lawyer familiar with Canadian Real Estate who can work with your Realtor here in Canada and help finalize all of the closing details.

5.       Making an Offer and Closing

It’s also good practice to prepare for the closing process ahead of time, to avoid any last minute scrambles. Thanks to technology, offer documents can be safely and securely signed digitally. When it comes time to sign the mortgage, you may choose to sign in person, or you can execute a Power of Attorney who lives in Canada to do the signing on your behalf. Again, your Realtor will help guide you through this process.


Working with a Realtor is important

Buying a property in Canada is an exciting venture, and it’s a huge milestone for many non-residents. Whether you plan to live here one day or just want to invest, do your research and take the next steps. I’ve helped many foreign buyers find the properties that fit the needs and goals, and I would be happy to do the same for you. Email me at or call me at 416-543-4939 and let’s start the conversation.