Buying property in Canada: Your Full Guide 2024

If you’re considering buying property in Canada for yourself, as an investment or as a second home, you’ll need to get up to speed about the Canadian property market and the home buying process. This guide covers all the essentials, from the best places to buy property in Canada, to Canadian property taxes and ownership rules, as well as taking a look at some great real estate sites to get your search started. Let’s dive right in.

Can a foreigner buy property in Canada?

First, an important note if you’re an expat in Canada, or considering buying a Canadian property as a non-resident. The recently passed Purchase of Residential Property by Non-Canadians Act looks set to make it difficult for foreigners to purchase Canadian properties from January 2023, for an initial 2 year period.

At the time of writing this looks likely to mean that many properties in Canada will only be available for purchase by Canadian citizens, permanent residents (PR) or temporary residents who are covered by the Immigration and Refugee Protection Act. Some homes outside of major metropolitan areas, as well as vacant land, are exempt from these rules - and ongoing discussions and potential challenges to the new laws may mean further changes in future.

If you’re not a Canadian citizen or PR, and you’re not buying a property alongside a Canadian spouse or common-law partner, you’ll need to double check the latest developments before you start to search for your perfect Canadian property.

What are the requirements to buy a house in Canada?

If you’re a Canadian citizen or PR, there are no restrictions on buying a home in Canada for yourself or as an investment. Rules which temporarily restrict property sales to foreigners may apply from January 2023 for a period of 2 years. If you’re an expat or looking to buy as a non-resident you’ll need to get up to speed on the latest developments before you buy.

Assuming you’re eligible to buy property in Canada, the key requirement you’ll need to know about is around paying a down payment. In Canada the amount of down payment you need to have prepared is determined by the value of the home:

• If your property is worth 500,000 CAD or less, you need a 5% down payment

• If your property is worth 500,000 CAD to 999,999 CAD, you need to have saved 5% for the first 500,000 CAD of the cost, plus 10% of the value above that

• If your property is worth 1,000,000 CAD or more, you need a 10% down payment

Of course, you’re always free to offer a higher down payment - if you’re paying under 20% as a down payment you’ll also need to get mortgage loan insurance.

How to buy a home in Canada step by step

The exact process you’ll need to follow to purchase your Canadian property may vary slightly based on your situation and the value of the home. It’s always worth getting professional advice to make sure the process runs smoothly - particularly if you’re new to Canada.

Here are the basic steps you’ll need to take:

1. Set a budget for buying your new property, and secure a mortgage if required

2. Research and view properties online, in person or through an estate agent

3. Negotiate a selling price once you’ve found the right place for you - you can do this by yourself or through an agent

4. Prepare and agree a formal Offer to Purchase - this is usually done with your real estate agent, lawyer or notary

5. Make your downpayment - you may need to buy mortgage insurance depending on the value of the property

6. Get a home inspection to ensure the property is structurally sound - your notary or lawyer will also complete searches and due diligence checks to make sure the sale is legal

7. Once you’re satisfied, you’ll be required to finalise all payments for the property and any related tax and legal costs

8. On closing day you’ll meet your lawyer or notary to sign the final documents and get your keys. Congratulations!

Canada property prices

We’ll get into the Canadian property market in a little more detail later - but it’s safe to say it’s been a bit of a roller coaster during 2022. The average property price nationwide hit 735,400 CAD in October 2022, which is over 10% down on 12 months earlier. This is broadly seen to be a response to rises in the interest rates which have made home ownership more costly for anyone who needs a mortgage.

Of course, property prices do vary widely across the country, and are subject to change over time. We’ll look at the cheapest places to buy property in Canada later if you’re on a budget.

Best places to buy property in Canada

Let’s round up some of the most popular places to buy property in Canada, and why you might be interested in them.

Vancouver

Vancouver has a lot going for it, from a great location with ease of access to nature and a quick drive to the US border if you need to travel. It’s lively and diverse, and frequently voted as one of the top global cities to live in, with a mild climate as a bonus. However, it’s also one of the most expensive places in Canada to buy property - so you’ll need to weigh up the costs against the benefits.

Montreal

If you’re looking for a place in Quebec, Montreal is attractive as a vibrant city with plenty going on in terms of arts and culture. Although French is the official language here it’s a pretty diverse place, which adds to the atmosphere and makes it all the more enjoyable as a place to call home. Property prices are still relatively high - but outside of the city centre you’re likely to find you pay something like half the cost per square metre compared to somewhere like Vancouver.

Toronto

Canada’s banking, financial and IT hub, Toronto is a large and diverse city which draws in Canadians and newcomers to the country alike. It’s correspondingly expensive as a place to live, but the good news is that the Greater Toronto Area still has some great housing where it’s easy to access the heart of the city, without the price tag of living right in the centre of it all.

Cheapest places to buy property in Canada

In general terms if you’re looking for a more affordable Canadian property it pays to look outside of the major cities, and pick smaller towns or more rural locations if you can. Beyond that, where you can pick from comes down to the broad area you need to be in.

If you’d still rather find a slice of city life with a lower price point, options like Quebec City and Saskatoon both have relatively low house prices and are well rated in terms of their safety and infrastructure. If you’re thinking of something more rural you’ll have a broad range of choices depending on whether you’re looking for a coastal retreat or new mountain home, a place in a village or something more off the beaten path.

Is buying a house as an investment in Canada a good idea?

Whether or not buying an investment property in Canada will work for you will depend a lot on your situation and investment targets.

During 2022 the Canadian property market has seen some turbulence (more on that next), which may deter investors. However, the cooling seen in property prices has strong regional variations, which means there are still places where property investment may pay off in the long term. This is particularly the case in areas where property supply is limited and new building is slow - however, as with any investment, you’ll need to do your research and weigh up your options before you leap into investing in Canadian property.

What’s the property market like in Canada?

As we mentioned earlier, the Canadian property market has had a hectic couple of years, with average home prices topping out at 816,270 CAD in February 2022, before dropping back over 20% to their October 2022 average.

There are significant regional differences in the costs of housing - and how much these market fluctuations have impacted. In the Greater Toronto Area (GTA), for example, home sales are down nearly 50%, as buyers move to cheaper areas to continue their search for a new home.

Other areas have had a less severe knock - British Columbia has seen smaller price falls compared to Ontario for example, while prices in Quebec City have actually gone up 9% over the same period.

All in all while the market is turbulent at present, there are still great deals to be had if you’re prepared to search.

How much does it cost to buy property in Canada?

Let’s look at the average housing cost per square metre for some properties in different cities in Canada. Data is taken from Numbeo, which aggregates live data to come up with up to the minute cost of living information.

Financing a property purchase in Canada

There are a few common ways to finance a property purchase in Canada:

• Buy in cash using savings

• Get a mortgage in Canada through a bank or broker

• Get a mortgage or loan in your home country if you’re an expat in Canada

Whichever route you think you’ll take it’s worth getting professional advice to help you decide which option might suit you. We’ll look at Canadian mortgage options in a little more detail next.

Getting a Canadian mortgage

Major banks in Canada offer a range of variable and fixed rate mortgage products to people buying property in Canada. Which is best for you will vary depending on your situation. In general, eligibility requirements include:

• Proof of a stable income

• Comfortable ability to pay back mortgage alongside any other debts and day to day living costs

• Credit score of 600 or more

• Down payment at or above the minimum required by law for the property type

Many providers have mortgage affordability calculators online which are a good way to assess whether or not your application may be approved. Once you’ve decided which provider you’d like to apply to, you’ll usually be able to apply for pre-approval online so you know how much money you’ll have in your budget to buy property in Canada.

Paying property tax in Canada

It’s worth taking professional advice to help you calculate the full cost of any taxes you need to pay for Canadian property, and to make sure you’re fully complying with the relevant laws in the region and city you’re buying in.

Canadian property taxes are set  by the region or municipality the property is in, with certain cities also adding their own levies on top of any regionally collected tax. Tax  can vary by property type, and is chargeable based on the assessed value of the property, which may be periodically fixed or based on the sale price. This can mean that calculating the full amount you need to pay requires a bit of work.

To give an example, Toronto property taxes in 2022 are made up of 3 different tax rates:

• City tax rate

• Education tax rate

• City building fund

The percentage tax may vary based on the property type, with residential, commercial and industrial properties charged differently for example. This makes for total tax rates that may vary from as low as 0.16%, to over 2% depending on the situation. Because the calculations are somewhat complicated, you’ll want to double check the details for your preferred location and property type before you progress a purchase.

How easy is buying property in Canada for foreigners?

The process to buy a property in Canada is pretty straightforward, and historically there have been no rules in place to stop foreigners buying Canadian real estate. However, as we mentioned earlier, this looks like it may change - for high demand locations at least, with a temporary ban on foreign buyers set to come into place for some locations, from January 2023. Check out all the latest details before you start your search.

How to find a Canadian property

Searching for property in Canada is easy - even if you’re not in the country. There are plenty of estate agents and umbrella websites which pull together listings from around the city, which can be a great place to start when finding your new Canadian property.

You can also work with a specific real estate agent to help narrow down your search, including specialist agencies which exist to support foreign buyers who may be unfamiliar with the processes used to buy property in Canada.

Canadian property websites

To kickstart your research here are a few Canadian property websites to browse - maybe you’ll find your perfect Canadian property:

• Realtor.ca

• RE/MAX Canada

• Zolo

Conclusion

Buying property in Canada has a fairly straightforward process - but with new laws expected to come into force from January 2023, finding a place as a foreigner may become more of a challenge. If you’re entitled to buy property in Canada you’ll have a good choice of places to pick from, including city and countryside locations, new builds and heritage homes, and land to develop your own perfect property. Use this guide to get you started in your search, and good luck on the journey to buy your new home in Canada.