Non-Residents
There are many lenders that provide mortgages to non-residents. These lenders will generally finance a maximum of 65% to 75% of the purchase price or appraised value, whichever is lower.
Some of the documents that lenders may require are as follows:
- Appraisal by a qualified, bank approved appraiser
- Proof of down payment
- Credit bureau from your country of origin
- Reference letter from bank in country of origin
To facilitate making payments on the mortgage, it is a good idea to open a Canadian dollar bank account in Canada.
If the property is a rental property, non-resident purchasers must be cognizant of the tax implications. Non-residents are required to pay Canada Customs and Revenue Agency (CCRA) 25% of the gross income from the property. This amount can be reduced by filing a Form NR6 return which sets out the projected income and expenses on the property. In addition, non-residents will also need to file an annual tax return for income on the property. CCRA will allow you to charge expenses incurred during the past 2 years to offset your income.
It’s recommended that you consult a chartered accountant with knowledge of cross-border taxation. Maria can refer you to a qualified individual.
