If you are a citizen of the United States of America, buying a property in Canada wouldn’t be a bad option. Between 2004 and 2014, nearly 34,000 Americans moved to Canada, either for employment or education. The number has surely increased in the last one year.
As more and more Americans are moving to Canada, the Canadian real estate market is becoming the focal point for American investments. Buying a real estate in Canada is actually easy for Americans because there’s no red-tapism.
Buying a Canadian real estate
But before you invest in a Canadian property, you should consider the following tips:
- Consider a US Bank: Firstly, you should know that mortgages are different in the US and Canada. Although both countries rely on the credit history of real estate buyers, they have their own way of lending credit. Consider a US bank before approaching a Canadian bank for credit because the rate starts low initially and increase depending on your lender’s assessment of work stability, income, assets, time period and credit history.
- Consider buying with mortgage loans: If you feel you should approach a Canadian bank, consider Canadian mortgage loans. Qualifying for a Canadian mortgage loan doesn’t require you to be a Canadian taxpayer. The low rates of interest on mortgage loans make buying easier. But before that, your lender should scrutinize your earnings and assets because most Canadian banks don’t recognize credit history of the US citizens.
- Don’t forget home insurance: Irrespective of the type of loan you avail, home insurance is mandatory for buying Canadian real estate. You should contact insurance companies that specialize in cross-country purchases. Try to get a quote before you make an offer so that cumbersome paperwork and documentations don’t consume time.
- Don’t ignore the taxman: The Canada Revenue agency and the Internal Revenue Service work together closely and share vital tax-related information with each other. Before buying a Canadian property, you should specify the purpose behind the purchase. Using the property for generating revenues will call for tax payments under different tax legislation of both countries. The good news is, both the revenue agencies provide a foreign tax credit that cuts down US tax or Canadian tax payments significantly.