Canada offers beautiful and varied landscapes, together with a totally different way of life to many European countries which is one of the main attractions to foreign nationals. The economy is heavily dependent on natural resources such as oil, gas and minerals and while obviously tied in the main to commodity prices, the economy has performed very well of late.

Canada is actually the second largest country in the world by landmass, and while not all of the land is fully populated (77% of the 32 million population live in towns or cities) it really is a country of discovery.  The close relationship with the USA offers a fair degree of safety to the overall economy, with additional trade relationships further strengthening the situation.

The Canadian property market: is very different to the usual European market, although on further investigation it seems to be a lot simpler.  Generally houses are more spacious with large basements being normal. This can often double the floor space of your property.  Not generally seen as a first port of call for relocating your life, Canada really does have a lot to offer 

The next 20 years are expected to see an increase in the so called “baby boomers” sector of older people who have money to spend.  While historically it has been assumed that the older generation is not very active in the housing market, research in Canada suggests that many will downsize to smaller properties.  This will create an increase in demand for these types of properties, and leave the larger properties for some of the younger areas of the population.

Increasing numbers of British people are choosing Canada as the location for their second home, attracted by its spectacular scenery, laid-back lifestyle, political and social stability. Easier travel and increasing coverage by low cost airlines are also considerations, as is the fact that Canada’s international homes market is still young and developers seeking to attract British buyers therefore have to provide good value.

Rules and Regulations: Regulations on property purchase vary throughout Canada, so it is very important to find out about them when you are researching a particular area.

In British Columbia, New Brunswick, Newfoundland, Nova Scotia, Ontario and Quebec, for example, there are no restrictions on foreign ownership, provided you spend less than six months per year in Canada. However, in Banff, which is located within a national park, only businesses and employees of the park can own property, and even they can do so only through renewable 42 year leaseholds. Each province has a different limit on the amount and kind of land that can be owned.

Unless you are buying a new property from a developer, potential purchasers are required to register with an estate agent.

The Process: The purchase process in Canada is different from that in the UK and the practice of gazumping unknown.

The majority of Canadian estate agents cooperate in multiple listings so one estate agent can usually access information on all available properties in a particular area.

Once you have chosen a property, you should appoint an independent realtor (or buyer’s agent) to represent your interests. In the majority of property transactions, the seller pays both the agents involved. Your agent will draft an Offer to Purchase, which will then be submitted with a deposit, which is refundable should the sale fall through.

Once the offer is signed by both vendor and purchaser and any conditions (for example, mortgage approval) are met, the sale can proceed.

Costs: Purchasing costs in Canada vary from province to province and usually comprise between 4.7 and 11 per cent of the property price, making it one of the cheaper place to buy from a fees perspective.

A Goods and Services Tax (GST) of 7 per cent and a Provincial Sales Tax (PST) of up to 10 per cent are usually included in the asking price of new homes. Alberta is the only province that does not levy PST.

In New Brunswick, Newfoundland and Labrador and Nova Scotia, GST is combined with an 8 per cent provincial retail sales tax called Harmonised Sales Tax (HST) of 15 per cent.

Subject to certain conditions, GST and HST can be reduced or avoided (see the Taxation section).

Buying costs vary between provinces, but purchasers should allow up to £2,000 for legal fees, a survey and insurance. Purchase tax of between 0.5 per cent and 2 per cent of the price is also payable.

Finance: When deciding how to finance your purchase, consider all the options. Paying cash is  recommended, but you may not want to tie up a relatively large sum in this way.

There are other options are remortgaging your UK home or arranging a mortgage on your Canadian property through a Canadian or UK lender. Remortgaging offers the easiest solution. Releasing equity in a UK home means that the second home can be purchased for cash, without the need for another mortgage. However, this may only be feasible for those who own their first home outright.

Several UK mortgage providers will lend funds of up to 80 per cent of the purchase price for second home purchase over, typically, a 15-year term.

Canada’s currency is the Canadian Dollar ($CDN). The current rate of exchange is $2.01 CDN to £1.00 sterling.

There are no currency restrictions on the import or export of local and foreign currency. However, when considering moving money overseas, either in a lump sum or to meet regular financial commitments you should consult a financial adviser or foreign exchange risk expert, who can advise on ways of reducing currency fluctuation risks, such as spot or forward transactions

Taxation: The federal and provincial governments both impose income taxes, which together make up more than 40 per cent of total tax revenue. Taxes are progressive, the well off paying a higher percentage of their income than the less well off.

Canada has no Inheritance Tax as such. Inheritance is treated as the disposal of an asset and is therefore subject to Capital Gains Tax, currently 25 per cent.

A number of other federal, provincial and local taxes are payable by individuals, including sales taxes and property taxes. Residential properties are subject to annual local taxes of between 0.5 per cent and 2 per cent of their value.

Taxation of non-residents: Non residents pay federal and provincial income tax on all Canadian sourced income. As the UK has a comprehensive double taxation treaty with Canada, taxes paid in Canada may reduce UK liability.

GST and HST are charged on new homes purchased for private use. However, in some circumstances, i.e  if the owner of a resort property commits it to a rental pool and uses it for 10 per cent of the year or less a home is classified as commercial property and not subject to the tax.

Rental income is taxed at 25 per cent, but expenses can be offset against tax.

A non resident selling a property in Canada must pay Capital Gains Tax of 25 per cent, levied on a percentage of the profit.

Map of Canada


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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.