Houses and condos are considered a financial investment and there are no signs that the government rules will change anytime soon. A new wave of money from central banks is being put into the world economy in an effort to stabilize the negative effect of the Brexit vote.
No Housing Bubble
Canadian mortgage professionals have reported that there is no housing bubble even in the most lucrative places in Canada such as Vancouver, Toronto and Montreal. There are growing signs that global investors think that the real estate in Canada is a good investment hence real estate prices have remained strong.
The government can use certain tools to put a lid on the prices of property in Canada but they are far beyond the scope of the measures being proposed so far. Housing starts in key cities have mostly reached their highest levels in over a quarter of a century and there are economic reasons why there seems to be a never-ending demand for real estate.
In fact, even the strictest law changes seem to do nothing to deter global economic forces that are causing the prices of real estate to go even higher.
Start Investing in Canadian Real Estate
Based on trends spanning a few decades, owning property in Canada can be a profitable venture if you are familiar with the tax laws and if you know how to find a good property. Some condo developments in Toronto such as those owned by Louie Santaguida are known to be really profitable due to their excellent location, design and facilities. So knowing how to spot a good property when you see one is a primary requirement to ensuring a sound investment.
When it comes to owning property here, there is no citizenship or residency requirement. You’ll need to abide by immigration guidelines but you are free to temporarily occupy a Canadian residence. Even non-residents can own rental properties here but you’ll need to file your tax returns with the CRA annually.
When buying property, you will be required to pay provincial transfer tax and the rate varies from province to province. Some exemptions apply for first time buyers though. Purchases are also subject to GST but you may be eligible for a partial rebate if you purchase a newly built property or if it’s a builder-renovated property and you plan to live in it.
Rental Property Tax
You’re required to remit 25% of your rental income by the Canadian Income Tax Act. However, you may choose to pay 25% of the net rental income if you’re a non-resident, and you can do this by completing an NR6 form. For income properties incurring net losses, you can reclaim the taxes you paid previously.
In Canada, bank loans, property taxes and mortgage are tax-deductible if you buy an investment property.