BUYING IN CANADA
Buying property in Canada is very easy for expats and a viable option for those living in the country long-term. Canada has an open-door policy for foreign property ownership, and affordability is also an attractive feature, as Canadian housing prices are generally lower than those in other comparable global destinations.
When it comes to buying or owning property in Canada, non-residents have the same rights of ownership as residents and citizens of Canada. From a residency point of view, if expats plan to stay in Canada for six months or less each year, the government considers them a non-resident, which means they can still open a bank account and buy property. If, however, a person plans to live in Canada for more than six months per year, they must apply for immigrant status.
WHERE TO BUY
Calgary, Vancouver and Toronto were all ranked highly in the 2015 Economist Intelligence Unit’s top ten “Most Liveable” cities, and most centres in the country offer a multicultural societal blend set against a backdrop of rugged and spectacular scenery.
The country’s British and French origins feature in the European architecture; the American cultural influences through fanatic sport leagues and entertainment; Inuit traditions are realised through its contribution to the country’s rich and ancient history; and, more recently, Asian immigrants have made their mark on vibrant neighbourhoods throughout the country.
WHAT TO BUY
There are various types of properties you can buy in Canada. In each case, you are responsible for making the mortgage payments as well as paying the bills for your specific unit (for example, property taxes and utilities such as electricity, gas, water, etc). Bylaws are local municipal rules and regulations that vary across Canada. You are responsible for following these bylaws in the care and maintenance of your property.
Property types include: condominiums, detached house, townhouse, semi-detached house, duplex/ triplex.
Buying vs Renting
Expats are not only entitled to buy property in Canada, they are also bound to find the process surprisingly straightforward and hassle-free.
Canada’s unique Multiple Listing Service (MLS) – a centralised database that contains about 95 percent of all properties on the market in Canada – means that much of the hard work involved with finding an ideal property can be done by an estate agent. Simply go to an agent with a comprehensive list of requirements for the ideal home (location, size, amenities, etc.), and they can simply plug the information into a database and provide buyers with a full list of possibilities.
Lease agreements are very important in Canada and are usually followed to the letter. Be sure to read the contract carefully, as once it’s been signed, its conditions will be legally binding. The agreement will cover the following considerations: duration of the lease (usually 12 months), additional financial responsibilities of the tenant (usually, water will be included in the rental charge, but tenants will have to pay for gas and electricity usage), deposit (usually two months’ rent, refundable in principle), and forfeiture conditions (which explains how any breach of the contract leaves the tenant liable for eviction from the property).
Selling in Canada
Selling a property in Canada is very similar to selling a property in the UK. A property can be sold either through an agent (known in Canada as a realtor) or as a private sale. Those who choose to list their property with a realtor will need to sign a contract. The contract states how long the agent will list the property for and any fees associated with the sale. The contract length can be 30 days, 60 days or 90 days. You can also choose to extend the contract period with your realtor if you feel they have been committed to trying to sell your property.
There are several different types of contract as everyone has different needs or expectations and not all contracts suit all sellers. One type of contract is the ‘Exclusive Right to Sell’ which means that your agent will list your property and sell directly, or it can be sold through another agent who brings their client to your home. If you happen to sell your home outside of the agent, for example through friends and word of mouth then your agent is still entitled to the commission fee. If the agent sells the home through another agent then they will share the commission fee. Either way as the seller you are obliged to pay the associated agency fees. The home is also listed on the Canadian MLS (Multiple Listing Service) which means that house hunters and agents countrywide will have access to the property details and this can increase the chance of a sale. This is also the most preferred type of contract for the agent as it means they have a better chance of earning a commission on the sale of your home.
Migrating to Canada
Fortunately, immigration to Canada is handled on the federal level, so most of the laws and rules apply across the country.
A prospective immigrant may make use of several types of immigration programs with different implications and requirements. This is the list of the most popular permanent residency programs:
- Skilled workers and professionals
- Québec-selected skilled workers
- Self-employed people
- Canadian Experience Class
- Provincial nominees
- Sponsoring your family
LIVING IN CANADA
Expat parents will find the standard of education in Canada high, and the sheer assortment of schooling options impressive. In fact, even just the number of organisations charged with ranking and evaluating the schools in Canada is a force to be reckoned with; Canada prides itself on its transparent systems and education is no exception.
It makes sense then that concerned parents moving to this geographically large country with their little ones can stop worrying and start sifting through the resources that can help them make an informed decision. For those parents who would like to do a little “sizing up” of their own, the Fraser Institute annually issues both public and private schools in each province their own report card, measuring and comparing schools’ academic performances.
Healthcare in Canada is one of the most hotly debated topics in North America, especially as the debate continues on whether the USA would benefit from adopting a similar healthcare system to that which is in operation in Canada.
Canada offers all citizens and permanent residents universal public health insurance, which affords low-cost access to doctors and health practitioners. Unfortunately, expats with temporary residency in Canada are not eligible for the same benefits.
This insurance system, known as Medicare, allows individuals to seek treatment at both private and public healthcare facilities; though the overwhelming majority of hospitals, clinics and practices in Canada are, in fact, private. Furthermore, the system does not dictate which doctor or service provider an individual must use.
It is little wonder that more and more expats are considering working in Canada; the country not only weathered the global recession well but has steadily managed to increase the number of jobs available each year. In fact, Canada has experience positive economic growth over recent years. Much of this is thanks to the country’s strong commodity ties to China.
As a land built with the picks and shovels of immigrant labour, Canada has a history of welcoming foreign expats into the country. Thus, those with commendable industry experience and a degree of specialisation will find that there are a fair amount of job opportunities in Canada, particularly in Alberta’s oil patch.
Furthermore, experts anticipate that the manpower associated with the local baby boomer generation will be depleted in coming years, and thus Canada will find itself in an even more desperate situation to entice highly skilled workers and even migrant labourers to relocate there in order to sustain its expanding, dynamic economy.
The large cities, especially Toronto and Victoria, reflect a strong British heritage; Montreal is proudly French, and Vancouver mixes Indian and Asian cultures. Where America prides itself on integration of cultures in a said ‘melting pot’, Canada encourages coexistence in an ‘ice cream swirl’ or, as it is commonly referred to, a cultural mosaic.
While various cultures are encouraged to flourish; by and large, mainstream culture is very similar to that of the US – which will be largely familiar to expats as a result of the globalisation of the film and television industry. An exception is Quebec, a French lingual and cultural province that feels so at odds with the rest of Canada it sporadically tries to secede.
Financing Your Property
Foreign banks cannot lend mortgages in Canada, so you must use a Canadian mortgage broker. Non-residents can expect mortgages to cover 65% of their purchase. Residents receive 75% on average, although this can go up to 80%.
Mortgages can have interest rates of around 6% for long-term loans. Most home owners reimburse their mortgages within 15-25 years via monthly instalment payments. If your down-payment for the property is less than 25%, you must take out a mortgage insurance through your lender.
Paying Canadian income tax depends upon many different factors. One of these is residency and others include owning a home in the country, having relatives who live there and Canadian bank accounts.
If you are not considered to be a resident of Canada (in the country for less than 183 days each year) then you will only pay income tax on money that you have earned in Canada. If you are in the country for longer than 183 days then you are considered to be a resident of Canada and you can be taxed on money that you earn anywhere in the world.
Most people who earn money within Canada will not need to file a physical tax return as there is a ‘PAYE’ system in place for most workers. Calculating tax in Canada can appear to be complicated as there are two systems in place – provincial taxation and federal taxation. If you need to submit a tax return the two types can be calculated on the one form, unless you are living in Quebec.
Cost of Living
The cost of living in Canada is high, but when compared to other parts of the world, such as Western Europe, it is relatively cheaper.
There are significant differences in the cost of living in Canada between rural areas and major cities such as Toronto or Vancouver, which can be very expensive.
Mercer´s 2015 Cost of Living report, which measures the comparative cost of items in each city (including housing, transport, food, clothing, household goods and entertainment) ranked Vancouver at 119, followed by Toronto (126) and Montreal (140). Expats will find these cities to be very liveable thanks to the fact that Canada does provide substantial support towards the cost of health insurance and education at public schools.
It is important to note however that there are differences in incomes between cities, provinces, and of course, sectors. The highest paid sectors in Canada are mining and oil/gas drilling and work in the utilities – water, electricity, and telecommunications. On the other hand, expats working in the accommodation and food services, arts, entertainment and recreation sectors tend to have lower salaries.