You, like many people, might be thinking about high-tailing it to Canada after last night’s election results.
In fact, so many people panicked and considered a move to the Great White North that the Canadian immigration website crashed, displaying a “500 – Internal server error” message for hours. As more and more states turned red, the “let’s all just move to Canada” jokes became increasingly common on social media.
But in the event you did actually want to buy property and move to Canada, what would it take?
First, it involves recognizing that buying property in Canada is not a path to citizenship, said Leigh Freeman, a Canadian-American citizen and a real estate agent at Windemere’s Bellingham branch and Macdonald Realty in Vancouver. Canada welcomes buyers from all countries, and while there are no limits or restrictions for foreign buyers, property owners still have to go through the bureaucratic process of applying for a Canadian visa, he said.
Those hoping for citizenship must first become permanent residents and live in Canada for at least two years within a five-year period, according to Canada’s immigration and citizenship website (which works now). The process to obtaining permanent residency status can be long and complicated, making work and student visas seem like more attractive options. But these options are usually temporary solutions and may not put you on a path to citizenship. Even marrying a Canadian citizen does not instantly grant you citizenship privilege.
When it comes to buying property, though, the home-buying process is largely the same as it is in the U.S. As with other large metropolitan cities, the issue soon becomes finding something that fits within your price range.
“There’s kind of a sticker shock when buyers look at the Vancouver market,” Freeman said. “What Americans will find in Vancouver is that the prices are substantially higher.”
In May, the benchmark price for homes in the greater Vancouver area climbed to $1.09 million USD, according to figures from the Real Estate Board of Greater Vancouver. The benchmark price is a measurement that represents a typical property in Vancouver and takes into account factors — such as lot size, home age, and number of rooms — that are often excluded by averages and medians. The resulting figure supposedly forms a more accurate picture of the market.
American home buyers will also encounter a number of Canadian property taxes. Vancouver has received so much attention from foreign buyers that in August, the city enacted a 15 percent foreign buyer transfer tax. The tax is an effort by city officials to cool the red hot market, which saw foreign nationals spend more than $1 billion on Vancouver-area property between June 10 and July 14, CBC News reported. The tax applies to the Vancouver metro area and also includes the nearby cities of Surrey, White Rock and Richmond, among others.
Buyers can also expect a property transfer tax, which applies to any residential or commercial property purchase, Freeman said. One percent is taxed on the first $200,000 of the final sale price with an additional 2 percent tax on the value between $200,000 and $2 million. Three percent is taxed on any remainder more than $2 million. This tax applies to sales within all of British Columbia.
The additional taxes can add up quickly. Freeman recommends buyers look at areas surrounding Vancouver, such as Surrey, Ladner, Tsawwassen and White Rock, which can offer more affordable options. Keep in mind that some of those areas, including Surrey and White Rock, will include the foreign buyer transfer tax.
Even then, moving across the border in a fit of panic won’t make financial sense for many people, said Dean Jones, principal and owner of Realogics Sotheby’s International Realty. He recommends renting a home for at least a year to see if potential buyers can make the jump. And then American home buyers will face stiff competition from other foreign nationals who have been streaming into the Canadian market for years.
“A similar phenomenon has been coming from Asia for the last 20 years,” he said, referring to the influx of largely Chinese buyers snapping up Vancouver real estate. “Americans would only be the latest to seek financial safe harbor in Canada.”
_SOURCE_ Seattle PI