It’s Good to Know: Buying Real Estate in Canada
The Canadian real estate market isn’t just for Canadians. Americans may wish to find shelter from the faltering housing market in the U.S. by making some Canadian investments. But first, there are some things you need to know.
- Banking: Canada has a banking oligopoly, with five banks dominating the lending scene. It’s also strictly regulated by the government. There are programs for American residents buying property in Canada, so contact a Canadian mortgage broker or one of Canada’s major lending institutions (CIBC, Scotiabank, Royal Bank of Canada, TD Canada Trust, or Bank of Montreal) to learn more.
- Taxes: Interest on your home is not tax deductible in Canada. Income from investments and 50 percent of capital gains are taxed fully at your applicable income tax rate (which is higher in Canada than in the U.S.). Canada Revenue Agency (www.cra.gc.ca) has a website full of information that you ought to review before you make a purchase.
- The Economy: The Canadian economy is still strong. But everyone is concerned about the future because of troubles in the U.S., our high dollar (which is hurting our manufacturing and export industry), and the high price of oil. Real estate prices have stabilized, Canadian businesses continue to create new jobs, and houses continue to sell at a strong pace, so real estate purchases still make sense. But do your research first. You can get up-to-the-minute news feeds of what’s happening in the Canadian real estate market at www.renx.ca.
