Canada is widely recognized for its open attitude towards immigrants and has gained a reputation internationally for those looking to start a new business, establish a new career, or invest in the Canadian real estate market. Working in Canada under a work permit, and wondering if I can buy a home? The short answer is yes, but it is complicated. In this post, we’ll address whether you can buy a house on a work permit in Canada and what you need to know before you make the jump into homeownership.
A Guide to Purchasing Property on a Work Permit in Canada
In Canada, foreign nationals, even those on a work permit, are generally permitted to buy property. But there are some terms and restrictions that could impact your ability to buy property:
Eligibility Requirements
Do you know that if you have a foreign national, then you don’t need to be a permanent resident or a citizen in Canada? That means that individuals who are on working permits can buy a property. But there are no specific regulations around foreign ownership, though rules may vary by province. Some provinces have further rules — for example, extra taxes, or restrictions around the type of properties non-residents can purchase.
Financing and Mortgages
Obtaining a mortgage is one of the thorniest issues for foreign workers. Most Canadian banks are open to providing mortgages to non-residents, though you eventually need to satisfy certain requirements, such as:
- A 20-35% down payment (depending on your lender).
- Evidence of income and employment in Canada.
- Documentation of credit history, either in Canada or in your home country.
Work Permit Duration
How long your work permit is valid can affect whether you are eligible to purchase a home. If you’re working on a short-term work permit, financing might be hard to obtain, and you might not want to lock yourself into a long-term investment in property. Most lenders like people who are somehow “permanently” or at least long-term in Canada, that kind of people, like Permanent Residents or people with a work permit extended for many years.
Extra Taxes for Foreign Buyers
In some provinces, such as British Columbia and Ontario, foreign buyers of real estate are subject to an additional tax. For example:
- British Columbia has a foreign buyers’ tax on new property purchases in some areas of the province, including in Vancouver. The tax can be as high as 20 per cent of the purchase price of the property.
- In Ontario, the Non-resident Speculation tax is 15% of the property’s value in areas like the Greater Toronto Area.
When you are considering buying a house in Canada, also consider the factor of taxes for purchasing property in certain regions.
Types of Properties You Can Buy
As a permit holder, you can typically buy any form of property you want, a condo, a townhouse and a single-family home. But real property does have a few limitations. For instance, certain provinces may have limitations on foreign ownership of farm land or large rural properties.
Property Taxes and Fees
If you buy a home in Canada, you will also have to pay property taxes. They assess them by the municipality according to the value of the house. With regard to buying property, you may also have additional costs for, say, a land transfer tax, legal fees, or a home inspection. These added costs should be considered when planning to purchase a house.
Considerations before purchasing a home on a Work Permit
Long-Term Commitment
If you’re not sure you want to settle down in Canada, purchasing a home may not be what’s best. Owning property is a strong financial commitment, and if your work visa is temporary or could have an uncertain future, renting instead would be something you might want to consider
Local Market Conditions
Learn about the real estate market when you’re looking to purchase a house. The prices in cities like Toronto, Vancouver and Montreal can be high, plus you can experience some widely varying conditions in markets from region to region. Make sure you consult with a local real estate agent or similar local person, as they can be very useful in guiding you through this process.
Wrappin Up
If you are ready to take on the challenges, then, yes, you can buy a house on a work permit in Canada. The first step is to understand the eligibility criteria, the finances, as well as the continued taxes, which may apply in different specific regions. When you take into account all of the above, understand the correct guidance, and acknowledge the right information, you will certainly make an informed decision, and you are now on the brink of homeownership.
Do not be intimidated by the complexity of the Canadian real estate market. AJ Buys Houses can assist you, regardless of whether you are on a work permit or entering your purchasing journey for the first time. Our professional staff have you covered, allowing you a clear and less cluttered path. Get in touch with us today and discover an amazing home for you and your family in Winnipeg, Canada.
FAQs
Can I buy a house in Canada if I’m on a work permit?
Yes, of course, you can buy a house in Canada if you are on a work permit. But there are some limitations which depend on your status and the province where you are buying the property.
Do I need permanent residency to buy a house in Canada?
No, you don’t need permanent residency to buy a house in Canada. Temporary residents with a work permit can buy a home, but there may be additional regulations to consider.
Are there restrictions on buying a house in Canada as a work permit holder?
Yes, there are many restrictions on buying a house in Canada as a work permit holder. You also pay a higher property tax rate in some provinces.
How long can I stay in the house I buy if I’m on a work permit?
You can stay in the house for as long as your work permit is valid. If your work permit expires, then you should renew your permit, apply for permanent residency, or leave the country.
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