Canadians tend to love their destination vacation spots. Perhaps they need to escape winter or, perhaps, we just love travelling to a new location. Whatever the reason, we tend to spread out far and wide when becoming global property owners.
According to research, the top countries Canadians tend to buy their destination properties are:
- The United States;
- Europe, and
- South America.
Because these locations are large and offer their own tricks and tips for buying property, it’s a good idea to find a local expert, such as a real estate agent that lives and works in your vacation-spot town or city.
Turns out using an agent that is referred to you by a Realtor in your home-town can really help. You can leverage the reliance and trust you have in your home-town Realtor, to find a Realtor in any global town or city to help you find the right property and be better prepared to handle any differences there may be when it comes to buying real estate in a country other than Canada. Just keep in mind, you are not protected by Canadian laws if you buy property outside of Canada.
A local referral-agent can put you on the right path to understanding the local custom and laws, their city’s unique closing processes and whether there are any tax structures you need to be aware of as a foreign buyer.
Keeping a referral list
Dylan Nihte, a Vancouver-based Zolo growth manager and real estate agent, maintains his own international referral list — to ensure that Canadian buyers are well represented as foreign buyers abroad and to help foreign buyers looking to purchase a property in Canada.
This flow of clientele is beneficial for both the referring agent — as he or she typically receives a cut of the commission once the sale is finalized — as well as the receiving agent (they get an active buyer).
“If needed, I will do the legwork to vet a Realtor in any country my client chooses to go and buy foreign property in,” says Nihte, who often provides referrals to agents working in other countries for his clients and colleagues.
Foreign buyers in Canada
Turns out Canadian real estate is attractive to overseas buyers as well. Canadian Real Estate Magazine pegged Banff in Alberta, Niagara-On-The-Lake in Ontario, Whistler in British Columbia and Cape Breton in Nova Scotia as the top picks for foreign real estate buyers interested in Canadian vacation homes. For that reason, many Realtors in these cities will develop long-running relationships with Realtors abroad, to help facilitate smoother communication and faster transactions for foreign buyers.
Things to consider if you plan to buy property in another country
There are a few key points you, as a Canadian, need to consider before purchasing real estate in another country and becoming a global property owner.
First, buying real estate does not give you extra privileges that would allow you to stay longer in a foreign country then you’re typically permitted. In fact, over-stay your welcome and you run the risk of being taxed by a foreign government and losing your Canadian residency status (and your health care and tax breaks).
Next, if you buy property in a country that does not speak your native language, it is crucial to hire a professional who can translate all legal documents into your mother-tongue. This is to ensure you clearly understand your legal rights and obligations of the sale. Remember, ignorance of local laws is not an adequate defence in any country.
Finally, keep in mind that financing a property purchase in another country may require a higher down payment — like 35% to 50% of the property price — while lenders may also opt to complete a more thorough review of your financial situation. While financing decisions in Canada typically take one to five business days, a property purchase in another country may result in financing decisions being extended to two or three months. This can easily delay the process of becoming a global property owner. Keep this in mind when scheduling all the criteria for taking ownership.