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Purchasing Real Estate in Canada

February 6th, 2013 3:44 pm by

Purchasing real estate in Canada is a relatively easy process.  However, there are some regulations governing the sale of property that you should be familiar with before you begin your search.  Non-residents, those who are planning to live within Canada for a period of time of six months or less in a calendar year, are able to purchase property and open bank accounts without applying for immigrant status.  However, if you are planning on living within Canada for an extended period time, which is longer than six months in a calendar year, you will have to apply for immigrant status.  Further, if you are planning on working within the country, you will have to file the appropriate paperwork with Citizenship and Immigration Canada (CIC).

It is important to note that each province has its own rules and regulations governing the sale of property to residents and non-residents.  Therefore, it is important to familiarize yourself with them once you have decided where you want to buy.  

When looking to finance, keep in mind that as a Canadian resident, typically you will be able to finance approximately 75% of the value of the property.  However, if you are a non-resident that percentage typically drops to approximately 65%.  

Whether you become a resident or not, you should seriously consider the help of a professional realtor.  He or she will be able to help guide you through the process and educate you on what is common practice within Canada.

If are seriously considering purchasing a property in Canada, make sure to familiarize yourself with the additional taxes and fees that come with a purchase.  This is important because it will impact your budget.


Clearance Certificate. This fee is paid by the seller and ranges from approximately $300 to $1000 and it is dependent on the transaction.

Goods and Services Tax (GST). This tax applies to new construction and is typically 5% of the total value and is included in the purchase price.

Harmonized Sales Tax (HST).  This is collected by the Canadian Revenue Agency and is distributed among participating provinces.

Property Tax. This is an annual tax collected by the local units of governments and it ranges from approximately .5% to 2.5% of the value of the property.

Property Transfer Tax/Land Transfer Fees.  These fees range from approximately .5% to 2% of the total property value.  However, they apply differently in various parts of the country. 

Provincial Sales Tax (PST). This tax varies greatly in price by location.  It can range from 0 to 10% and is included in the price of the home.


If you are planning to purchase property, you will also have to consider the fees that go along with the purchase.  These may include but are not limited to realtor fees, appraisal fees, survey fees, inspection fees, attorney fees, property insurance, home owner associations and/or condominium fees.  Therefore, get clarification ahead of time to prevent confusion.

It is important to note that if you are on a corporate relocation, you will have to consult your company’s policies and procedures.  Some companies prefer you not purchase while on assignment.  Therefore, it is important that you clarify this ahead of time to prevent any misunderstanding in the future.