Regardless whether you reside in British Columbia, Canada with a Canadian citizenship or reside outside British Columbia, Canada without a Canadian citizenship, you are able to buy and sell real estate. There are key issues that you need to be aware of in order for you to make the most informed decisions regarding your investments.
Non-Residents "Purchasing" Real estate in British Columbia
-There is no citizenship requirement to own land therefore no restrictions on non-residents purchasing property.-There are income tax factors to be aware of when a non-resident rents or sells a property in B.C.
-Non-residents are permitted to stay in Canada up to 182 days (6 months) each year without being considered a Canadian residents for Canadian income tax purposes.
-Mortgage financing is generally available at 65% needing 35% as down payment (Varies with Lending Institutions) and can be conducted via phone, fax and/or email to gather your personal information.
-The services of a Canadian lawyer or notary public to prepare the mortgage documents and registration at the Land Titles office need to be arranged in advance of the completion date which can be couriered outside Canada for signing.
-A Canadian bank account will be necessary for mortgage payment purposes.
-See General Expenses for a list of typical expenses when purchasing your property.
-For more information on Non-Resident status see Canada Revenue Agency.
Non-Residents "Renting Out" Real estate in British Columbia
-By law, non-residents who rent out a property must remit 25% of their monthly revenue to Revenue Canada in anticipation of filing a Tax Return on their rental income by the end of the next tax year.
-Filing in a timely manner of the required form confirming a net loss on the rental investment may preclude the requirement for the 25% remittance.Non-Residents "Selling" Real estate in British Columbia
-When a non-resident owner sells Canadian property, the law requires a 25-50% holdback of the proceeds of the sale pending filing of a Canadian Income Tax return by the end of the next tax year calculating Canadian tax owed on any capital gain.
-A Clearance Certificate has to be obtained in advance of the completion date but not before there has been a contract of purchase and sale with all subjects removed.
- Outlines to the Canada Revenue Agency there are no outstanding tax issues with the property.
- Important where there is a capital gain.
- Normal time frame to process is between 6-8 weeks
-There is a Tax Treaty in effect between Canada and many countries, including the U.S., which allows a credit against the tax owed in Canada in the amount of what tax has been paid in the treaty country on any capital gain.