Buying a house in Canada by an overseas non resident
Hi
I am thinking of buying a house in Canada but I live in Australia. My partner is Canadian and I am just wondering if there are any taxes on money I would transfer to Canada for a down payment. The province I am looking at is B.C. Thanks for any help. |
Re: Buying a house in Canada by an overseas non resident
No
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Re: Buying a house in Canada by an overseas non resident
May I ask why you want to buy, and where abouts? It's just a big investment but I guess the house bubble or rise debate has been ongoing for decades now. Good luck.
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Re: Buying a house in Canada by an overseas non resident
Originally Posted by floatsy
(Post 11092941)
May I ask why you want to buy, and where abouts? It's just a big investment but I guess the house bubble or rise debate has been ongoing for decades now. Good luck.
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Re: Buying a house in Canada by an overseas non resident
Originally Posted by Almost Canadian
(Post 11092894)
No
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Re: Buying a house in Canada by an overseas non resident
Mmm the general thinking is that housing is going to go down but with the interest rate announcement yesterday I'm not so sure.
If it's something you aren't going to use for years, I'd wait until interest rates go up next year because that's got to do something. Also the Canadian dollar is plummeting and by then it will have bottomed out (although so is the Australian dollar). On the other hand lots of people are retiring and Kelowna always seems to be the #1 place to retire to in Canada (or possibly Victoria). I think it really depends on when you are planning on moving and what you are thinking of buying. Difference between a house and a condo. Also difference between new and used, because of the GST. As a non-resident you wouldn't get the GST rebate on a new house. (But this is not a huge sum, you get back roughly a third of the 5% GST if the sale price is under $450,000). |
Re: Buying a house in Canada by an overseas non resident
Originally Posted by erukus
(Post 11093009)
Hi I am thinking of buying in West Kelowna as I hear it is a good time to buy in Canada, and I am thinking of moving there one day. The value for money for property there is much better than here in Perth. I am very interested to hear your opinion though. Do you think there is still a bubble waiting to bust there?
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Re: Buying a house in Canada by an overseas non resident
Here's some reading for you
http://www.huffingtonpost.ca/tag/van...housing-bubble You would also have property transfer tax and would pay the full property taxes each year as a non resident. |
Re: Buying a house in Canada by an overseas non resident
We have a house in West Kelowna that we bought back in 2002 - good time to buy there:) We spend our summers there and rent it out for the other ten months of the year. You probably already know the area but if I can help with any neighbourhood info I am happy to....
Lisa |
Re: Buying a house in Canada by an overseas non resident
Take into account the capital gains tax risk. The property may be subject to capital gains tax in both Canada and Australia. Due to the currency exchange rates used, it is entirely possible that there could be double tax.
Also consider the impact from the deemed disposal capital gains tax on terminating Australian tax residence (if an Australian citizen/PR), also the Canadian provision requiring withholding from the sale proceeds if owned by a non-resident. If the property is rented out, then a Canadian tax return is likely to be required, as well as reporting the income on an Australian tax return and understanding how to claim credit in Australia for Canadian tax paid. Cross border real estate ownership adds a layer of tax complexity to life that should be considered in advance. |
Re: Buying a house in Canada by an overseas non resident
And a house is not a very liquid investment so it depends on your overall portfolio, I imagine.
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Re: Buying a house in Canada by an overseas non resident
Thanks for all the information, I will consult an accountant regarding the tax implications.
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Re: Buying a house in Canada by an overseas non resident
BTW I am also looking in Kelowna and not Vancouver!!
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Re: Buying a house in Canada by an overseas non resident
Originally Posted by JAJ
(Post 11094012)
Take into account the capital gains tax risk. The property may be subject to capital gains tax in both Canada and Australia. Due to the currency exchange rates used, it is entirely possible that there could be double tax.
Also consider the impact from the deemed disposal capital gains tax on terminating Australian tax residence (if an Australian citizen/PR), also the Canadian provision requiring withholding from the sale proceeds if owned by a non-resident. If the property is rented out, then a Canadian tax return is likely to be required, as well as reporting the income on an Australian tax return and understanding how to claim credit in Australia for Canadian tax paid. Cross border real estate ownership adds a layer of tax complexity to life that should be considered in advance. I wonder what constitutes living in Oz, if I moved to Canada for 6 months for example and sold the house and then moved back after? Also in relation to the legal side of things does anyone know how that would work with regard to my partner being a Canadian citizen and I not. Would both of our names be on the title as owners? |
Re: Buying a house in Canada by an overseas non resident
Originally Posted by erukus
(Post 11100763)
Thanks, I have consulted an accountant here in Australia and she has confirmed that I would have to declare the rental as income here in Australia and also if the house was sold while I am living in Australia then I would also have to pay capital gains tax in OZ.
I wonder what constitutes living in Oz, if I moved to Canada for 6 months for example and sold the house and then moved back after? Also in relation to the legal side of things does anyone know how that would work with regard to my partner being a Canadian citizen and I not. Would both of our names be on the title as owners? Where you pay tax would be where you were deemed a tax resident. If you became a tax resident in Canada, to avoid paying CGT, all your world income would need to be reported in Canada during that period. As far as domicile, tax residency for Australia, check with your accountant. If you retain a home and ties to Aus, you may still be considered a tax resident of that country. The authorities are getting wise to residents of convenience for tax purposes. Depends on the value and gains on the property, may be more hassle than it is worth. |
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