Can foreign buyers buy homes in Canada? 

Are you thinking about moving to Quebec? Welcome to our province! It is a fact you might already know, but Canada in general, and Quebec in particular, are known among other things for the resilience of their real estate market.  

You want to know everything you need to know before acquiring the home of your dreams? Vistoo will give you the relevant information and the additional details you need when considering buying your next home. 

What is the median price of a home in Quebec?

The Quebec Professional Association of Real Estate Brokers (QPAREB) has some interesting statistics concerning the median price of houses in Quebec.

The data has been collected by observing sales activities on the Centris real estate platform and includes the cumulative for the whole of the province between January and August of 2022:

For the Island of Montréal, the numbers below can give you a glimpse of the amount you can expect to pay for acquiring a property:

The median price is a good indicator in determining accessibility to the housing market, according to your current income. Though permanent residents and temporary residents may purchase real estate, recent developments in the housing market have markedly changed the situation. 

Starting in 2023, the federal government will prohibit the purchase of residential real estate by non-Canadians. We will explain in more details what that means for you.

Prohibition on the purchase of residential property by non-Canadians: What to do

If you are reading this article, you have probably already heard of the measure the federal government took this summer when they signed into law the Prohibition on the Purchase of Residential Property by Non-Canadians Act. 

During the COVID-19 pandemic, the real estate market went into overdrive, which led to real estate speculation and overbidding. 

To prevent the price of real estate from becoming prohibitive for Canadian households, the federal government will prohibit all purchases of residential property by non-Canadians starting January 1st, 2023. More details are available in the official statement on this subject: 

“As a temporary measure to help stabilize the housing market coming out of COVID-19, we will ban foreign money from purchasing a non-recreational, residential property in Canada for the next two years, unless this purchase is confirmed to be for future employment or immigration in the next two years.”

The Act does not apply to the following groups of individuals:

• Canadian citizens;
• Permanent residents;
• Any person who is registered as an Indian under the Indian Act. 

The exceptions provided for in the prohibition on the purchase of residential property by non-Canadians

However, do not worry. The law has already provided for exceptions in certain situations. The groups of individuals listed below are exempted from the Prohibition on the Purchase of Residential Property by Non-Canadians Act and can purchase Canadian properties. 

Please note that the following information is extracted as is from the text of the Act mentioned above:

• A temporary resident within the meaning of the Immigration and Refugee Protection Act who satisfies prescribed conditions;

• A protected person within the meaning of subsection 95(2) of that Act;

• An individual who is a non-Canadian and who purchases residential property in Canada with their spouse or common-law partner if the spouse or common law-partner is a Canadian citizen, person registered as an Indian under the Indian Act, permanent resident or person referred to in paragraph (a) or (b); or

• A person of a prescribed class of persons.

The law provides for some exceptions, and some of these still remain to be defined.

Considering the law that will soon come into force, and the current prices in the market, the first advice we can give is admittedly the most logical: If you can buy a property or obtain a mortgage on your Canadian real estate before the law comes into force on January 1st, 2023, do it without delay.

Some advice on buying a home in Canada as a foreigner

Make a budget that takes into consideration the most common expenses of purchasing a home. The mortgage is clearly the largest expense, but you should also think about what is called the closing costs. 

These costs include a portion of the services that have been carried out at the time the home is purchased, and usually represent between 1.5 to 4% of your mortgage’s total value.

Closing costs include the following:

• Land or real estate transfer tax;
• Lawyer fees;
• Applicable taxes (GST/HST);
• Adjustment costs (If, for example, the seller has already paid property taxes for a date that is past the sale date. In that case you would have to credit the seller a certain amount);
• The location certificate, or an estoppel certificate in the case of co-ownership properties.

You should also think about the other possible costs that could arise during the process, such as evaluation costs, home inspection costs and the welcome tax. 

Tax credits for homeowners

Whether you are a permanent resident or a temporary resident, there are some tax credits which might be available to you according to your situation. 

We were talking earlier about tax payments on your home. Though these costs might seem high to you, it is possible to deduct parts of these costs in your tax declaration the following year. 

If you want to know more about the tax credits available in each province and how they work, more information can be found here.

The federal government is also providing for a First-Time Home Buyer Incentive. Temporary residents authorized to work in Canada are eligible. 

Vistoo helps you search for the property of your dreams through its catalogue of properties in all the regions of Quebec. See the properties currently on sale directly from our website!