Housing options
 

Hi all,
My family and I are relocating to Nova Scotia later this year, but my wife is having a case of the wobbles. She wants us to rent a property first (and rent ours out back here) for the first year, before buying. I think she's hoping it will provide a safety net should things not go to plan (yeah right...I'm in charge ;).

I just wondered what other people ave done in the past, is it better just to cut loose and dive in, or does my wife have a point?

As always, any information is gratefully received.

Sean

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IMO, your wife is absolutely right I'm afraid! Buying in Canada before you know the area and are 100% sure you want to stay could be a veeeeeery expensive mistake.

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+1 your wife is spot on..now go and apologise!:p

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I agree. A wise move indeed. Rent until you are sure of your situation.
Bear in mind though that rental income received in the UK is taxable in Canada. There are also other tax considerations such as exchange rate increases or decreases and capital gains which may accrue after you become a Canadian tax resident. There are numerous threads on this aspect which you can find by searching the BE forums. Good luck whatever you decide to do.

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Sean, we've recently moved from NS back to AB, and I can tell you without any hint of exaggeration that almost all of the British families we met there are either planning on moving to another Province... or they have already moved (back to the UK or to another Province). A number of Canadian families we know, who werent originally from NS, are in the same boat.

Rent for a year or two (I would say 2, personally), and take it from there.
We rented for the first year, then bought a house, then decided we couldn't take it any more. Buying/selling houses is an incredibly expensive process, so dont do it lightly.

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Thanks everyone for the advice. Why the 'exodus' from NS Jericho? Any ideas?
I must admit, I do have a 'thing' for BC, but we have vacationed in NS for the past three years and really like it, but why would people be leaving??? Hmmm
back later.....gotta go apologize to the wife!!! :o

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:unsure: Can open ....worms everywhere

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Lack of job opportunities and the highest taxes in the country are probably the most cited reasons. The upside though is that property is relatively inexpensive.

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I just want to point out to everyone that i didn't start it.

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:confused::confused:

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I'd caution against renting out your house in the UK. Assuming it's not in central London what you'll have a year after leaving is a house worth about the same but in need of repairs and so harder to sell. Maybe it'd be better to be done with it.

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talking negatively about NS.

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Oh, I see.
Well for what it's worth I landed there in 1969 and left for Ontario in '71 because of much better career opportunities. I only returned in 2001 when I retired because that's where my wife is from. That's the only reason that I spend half the year there. She likes to be near her family. If it wasn't for that we'd be elsewhere !

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I know this is getting away from the original housing question, but being way out West, I'm curious about the comments made about families leaving or wishing to leave Nova Scotia. Are the reasons mainly/solely economic? Is the unemployment rate significantly higher than elsewhere in Canada? Or are the incomes earned lower and, therefore, the problem? Are there cultural issues? I~ thought loads of expats - particularly from the UK - lived there and, I presumed, liked it.

Just curious. Mods, if you think appropriate, please feel free to transfer to another thread etc. Thanks.

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WORMS...WORMS..EVERYWHERE...

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? Eh? Do you mean in Nova Scotia - or on here? I think I'm being thick!

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The Maritimes (NS, NB,PEI, and NL) are considered to be a "B" market and pay rates and salaries are generally lower for comparative trades and professions than places like Ontario for instance. Taxes and the general cost of living are also higher. As for cultural issues I can't say. I only know a couple of Brits and they seem to be content with their new lives. I personally do not know of any Brits who are "leaving in droves" but then I don't live in or near Halifax or Fall River, which seems to be very popular with Brits, when I'm in NS.

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High cost of living, high taxes, comparatively very little to do (limited choice of restaurants, places to go etc). The malls, if you/your wife likes to buy clothes, are shocking. It's very isolated- it's a good 7-8 hour drive to the US border. The nearest big city is Montreal (10+ hours away). In many ways, it's stuck in a timewarp- example, Ikea opened there around 10 years ago and had to close it's doors due to poor business (some might say a lack of Ikea is a positive :), but i think it demonstrates the reaction to "new" things).

House prices are cheaper than Vancouver/Toronto/Calgary, but I think the high utility prices more than make up for it.

On the plus side, the scenery is beautiful, and in the summer, you've got beaches, lakes, etc.

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Thanks for this information Simon. The wife's face when I told her about being taxed on rent in the UK was a picture :eek: mixed with :frown:. I've looked at a couple of threads, and it seems that selling here and renting in Canada could be initial preferred option.

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Can you claim tax relief against interest paid on your UK mortgage though? I seem to remember you used to be able to. We sold when we moved out of the UK. Apart from anything else, we needed the cash!

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Don't forget that you'll also pay capital gains tax on your UK house when you sell it, based on the difference in value in Canadian dollars between the time you land and the time you sell. So, if the Canadian dollar declines in value over that time, you can end up having to pay tax even if you sell the house for fewer pounds than you paid for it.

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Unless you sell before you leave surely? We didn't pay tax when we sold our house to move here.

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If you are resident of Canada, you will be taxed on this income in Canada in CAD$ using the prevailing FX. You can claim deductions for legitimate costs of maintaining the property for rental, such as mortgage interest, agency fees etc.

You would need to fill in a T1135 in Canada reporting the asset on your 2nd tax return you file in Canada.

If you keep the house, be sure to get a valuation done just prior to leaving the UK and keep it safe. The day you become tax resident in Canada, you are deemed to have disposed of this and re-aquired it at market value in CAD$. When you sell, the proceeds are converted to CAD$ for tax purposes (you may still be holding GBP though). If there is a difference, you can claim a capital loss if you get less or if more you'll pay capital gains tax.

Then of course if you hold the funds as GBP and you make another gain from receiving the fund to converting it, you pay tax on the currency gain as well.

I would rent a house and sell the one you have in the UK. Safety nets sometimes make it too easy not to settle as it is too easy to go back. Renting lets you find an area you like to live and then buy when you settle down after 6 months or so.

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If you sell before you take up tax residency it is not an issue, nor is it if you sell before Dec. 31 the year you arrive if you lived in it that calendar year. If you move here and move back without selling it is not an issue either.

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NS is a nice relaxed place.. If you live near Halifax it's ok but you would have a serious culture shock if living a long way from Halifax.
We've just moved closer to Halifax and we are already finding it a much better fit.
If you have a decent job in NS then you can have a very decent life but if you're struggling it's not so much fun and you can't eat the scenery...
I would definitely recommend renting to start with...

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Thanks for this info. My wife really likes Fall River, and we've stayed around St Margaret's Bay (although only in the summer...even then it was misty near Peggy's Cove some mornings, but clear as a bell when we drove inland). I think we'd be looking around the areas reasonably close to Halifax (Hammonds Plains, Windsor junction, Tantallon etc).

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That's for the information in this thread, its been really useful. I'm not moving to NS but am looking to sell my house or rent it if I couldn't sell by the time I left.

I'm now thinking definitely no to renting, knew I would have to pay tax but nothing else.

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Don't forget to fill out the foreign tax credit form if you pay taxes on the foreign rental income

http://www.cra-arc.gc.ca/E/pbg/tf/t2209/t2209-13e.pdf

In Ireland as a non Irish resident I will pay 20% on my rental profit (Rent less allowable expenses)

So say I rent for €800 and have €200 of expenses in insurance, management fees 75% of my interest on the mortgage etc


So my rental profit is €600 and revenue.ie take 1/5th of that or €120 a month or €1440 for the year.

Canadian revenue at year end see I earned €9600 but in Canada my allowable expenses are actually better in that I'm allowed to claim 100% of my interest and one or two other things like life insurance on the mortgage so my actual profit is €500 a month or €6000 for the year

Marginal rate in Canada of say 40% so my €6000 rental income costs me 2400 in taxes. The above form offsets the tax I paid in Ireland of €1440 so I pay €960 to the Canadian revenue (1440 in CAD strangely enough)


If my wife was working then we'd let her declare the income and try to avail of a lower marginal tax rate.

Oh fun fun fun

T1135 for the net worth of your UK property as well http://www.cra-arc.gc.ca/E/pbg/tf/t1135/t1135-13e.pdf

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Some snags with renting out the house at home (based on the experiences of someone close to me):

- the tax mess
- it's your house, even the best tenant isn't going to treat it as you would, the management company will send pictures of things that got banged up and need replacing; perhaps things that were once precious to you
- the fact that, with the tenant in the house you can't easily sell it, without the tenant you have to cover the mortgage
- an increase in the cost of covering the mortgage due to exchange rate movements
- a fall in the value of the house
- the increased cost of a mortgage valid for a rented property

It could all go fabulously well, of course, a mate of mine rented out his house in the Chalfonts went he left England, that was in the early eighties. A couple of years ago he remembered having it, realised it was worth a small fortune and cashed in. I suggest that, for most of us, that's not going to happen.

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i never declared my income on my rental back in the UK as it stayed in my UK bank account..i never paid tax in the UK on it either as i was classed as a foriegn landlord.

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The other thing to consider is that houses can sell really slowly in NS so if you decide you do want to move & all your money is tied up in the house you may end up stuck for a while

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It's a lot different to the UK where we've been spoilt for choice, that's for sure, but is that really a bad thing? After all there's a reason we all wanted to leave in the first place.

Personally I couldn't stand to live in Fall River, just seems like a load of boring box stores & full of British people, & I can imagine there isn't much to do unless you go into Halifax.

I'm sure if people ventured a bit further & got a real taste of NS they would like it more. In my town there's always lots of events going on, there's hiking trails, quaint little shops/galleries & about 20 restaurants/cafes (which for a town of only 480, that's not bad). My only issue is the nearest cinemas are an hour away but the theatre does play a new release every week, so it could be worse.

Yeah it may take a while to drive to the US but if you do you are on the East coast which has got to be better than driving south from Manitoba & ending up in North Dakota. Plus New York is only a 2 hour plane journey.

I think for people who want the same life they've had in the UK, Nova Scotia is not for you. For those that want a laid back lifestyle, who are a bit outdoorsy, like to be part of a community, & aren't too bothered by having 'stuff' then it's perfect (of course depending on your work/financial situation)

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:goodpost: I think this is very well put. Different people want different things from life. One size doesn't fit all. To some degree being on an Island myself, it could be argued we're a bit "isolated" from the rest of Canada, but for me - at the moment anyway - that's fine.

Horses for courses!

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Cheating is great. Until you get caught.

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Ultimately, city or rural is dependant on what you are looking for.
Just remember that small town NS (Canada probably) can be cleeky... In NS certainly for the next 100 years you will be a "come from aways"...

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Totally agree with this - since moving away from NS we can see that living there was like we were living in 1970. :D

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and even more so in Porters lake..

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People can be cliquey anywhere though even the UK, whether it's at the school gates or in a new job, some people just decide your face doesn't fit & that's it

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I wouldn't say we're exactly 'party people' anymore (although I'll dance off against any young whipper snappers!!). The Bayers Lake Mall seems to be fairly good, but we have a seven year old and the education system needs to be a consideration (got talking to a lady in Dartmouth last year and she said it wasn't as good as other provinces)...guess thats a topic for a different thread though :blink:

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I don't think PL is any worse than other places in NS actually. It has a nice community feel but it is still in NS so nuff said.