Buying a House in Canada

When you start over in a new country, you'll have dreams of finding your perfect home to plant roots in. But with a new setting comes a different way of doing things, along with different rules and regulations. This blog includes everything you need to know about buying a house in Canada or renting one when you've just set foot on Canadian soil.

But before we get into the ins and outs of the property market in Canada, we should first take a look at an update on the Canadian government's current stance on home ownership in the Great White North.

Canada's Temporary Ban on Foreigners Buying Homes

The Prohibition on the Purchase of Residential Property by Non-Canadians Act, passed in the Canadian parliament in June 2022, came into effect on the first day of 2023. The Act serves as a temporary, two-year ban on foreign investors who do not have Canadian citizenship or Canadian Permanent Residency. The Act was implemented as a strategic move to lower housing costs, which had risen dramatically over the last few years.

This Act prevents foreign businesses and people who aren't Canadian citizens or permanent residents from buying residential properties not used for recreation. By definition, residential property includes detached and semi-detached houses, rowhouse units, residential apartments, and residential buildings.

Why These Measures?

The Act was implemented as a strategic move to lower housing costs, which had risen dramatically over the last few years. Early 2022 saw a spike in the cost of homes in Canada. While the price later dropped, it was still worrisome that owning a home may be out of reach for too many Canadians. The government pointed out that high housing costs were due to foreign investors securing properties in the Great White North without actually taking up residence there.

So Who Will be Eligible to Buy a Home in Canada?

You can buy a home in Canada if you have obtained Canadian Citizenship or Canadian Permanent residency, are a non-Canadian who has bought a home with a Canadian spouse or common-law partner but is going through a divorce, or a non-Canadian who has inherited a home.

It should also be noted that the Act is not a total ban on buying properties by foreign investors since they can still acquire properties for recreation, like cottages and vacation homes. Also included are properties with more than three separate units.

The Act also doesn't include properties located outside of census metropolitan areas.

Can Temporary Residents Buy a Home in Canada?

The Act does not affect Temporary residents who are in the country on valid study or work permits. You must prove that you intend to become a permanent resident and settle in the area where you plan to buy your home.

If you are a student enrolled at a Canadian designated learning institution you must:

Have all required income tax returns filed
Have been physically present in Canada for at least 244 days per calendar year in each of the five calendar years before the year you bought the home before the year in which the purchase was made,
Make sure the home value is not more than $500,000, and
Not have more than one residential property

If you have a valid work permit you must meet the following conditions:

You must have worked in Canada for at least three years within the four years before buying your home
If your position is full-time, you must have filed all income tax requirements for a minimum of three of the four taxation years before you bought the home.
You cannot own more than one residential property in Canada

Buying a Home in Canada

The Cost of Buying a Home in Canada

According to the Canadian Real Estate Association (CREA), the national average home price was around $662,000 in February 2023. This is a decline of 18.9% compared to a year ago but an increase of more than $50,000 from January prices due to outsized sales increases in the Greater Toronto and Greater Vancouver markets.

Canada's cost of living is much lower than other first-world countries. You should, however, still ensure that you are fully prepared for the costs of buying and renting a home in the country. Remember that living costs vary from province to province and city to countryside.

The Process of Buying a Home in Canada

Before you take the first step toward buying a home in Canada, make sure you read The Canada Mortgage and Housing Corporation's (CMHC) two guides on the subject, namely the Buying Your First Home in Canada: What Newcomers Need to Know guide, as well as the Homebuyers Checklist: A Newcomers' Guide and Workbook.

Finding your Ideal Home

It is advisable to do some planning prior to your home purchase to prepare for the costs that come with it. These are likely to include:

Heat systems
Taxes
Maintenance

What is the Best Way to Find a Home to Buy?

Visit property websites such as Realtor.ca, Remax Canada or Zolo
Visit areas in which new developments are abundant
Check newspapers or property magazines
Ask friends, family or people in your network for recommendations
Explore neighborhoods you think you’d like to live in

Are Real Estate Agents the Way to go When Looking For a Home?

Real estate agents are helpful in the process of finding that dream abode. They'll:

Take your needs into account
Make appointments for property visits
Assist in price negotiations

Finding a Real Estate Agent

Ask people in your network or community for recommendations
Ask your bank for a list of trustworthy agents
Take note of the for sale signs in neighbourhoods you'd like to settle in
Check out the Canadian Real Estate Association website

Make an Offer

As soon as you find a suitable home, you'll have to make an "offer to purchase." Your real estate agent will help you , if you have one. If this is approved, you'll need to get a lawyer or notary to handle the transferral of the property onto your name.

Property Financing

When you buy a home, you are likely to need a loan to finance it. In Canada you'll be able to secure a mortgage loan from:

A bank
Financial institutions, like credit unions or insurance companies

Mortgage payments take up to 25 years to pay up, with interest charged on the amount borrowed.

Your Credit Score

Buying a home requires a good credit score and history. Being a newcomer in Canada means that you may not have a credit history in the country. So if you want to buy a home in the Great White North, make building a new credit history a priority.

Home Inspection After Offer Made

Once you make an offer on a home, insist that the home will have to pass a professional home inspection. With this condition in place, you'll be able to cancel or adjust your offer should some issues with the home be uncovered.

Inspections are carried out by a home inspector - at a fee. You'll receive a report on the condition of the property to go through, after which you'll be able to evaluate whether the repairs required will affect your offer.

Finding a Place to Live When You Get to the Great White North

When you get to Canada for the first time, as a newcomer, you'll need a safe place to live in while you find your feet. You'll find a number of housing services offered by:

Local, provincial, territorial and federal governments
Settlement services agencies
Community groups
Individuals

Temporary housing for when you arrive in Canada

If you haven't secured a place to stay when you first land in Canada, you can opt for one of the following:

A hotel
A hostel
A short-term rented property
Hospitality from a friend, family member or host family

By choosing one of these options, you'll buy time to ease into your new life in Canada and learn more about how things are done here. This will give you time to settle in and learn more about Canada. You should make contact with a local settlement service provider organization to get information on housing and support services for newcomers. You'll also be able to learn more about long-term housing options.

Renting in Canada

You'll also want to learn as much as possible about the area you're thinking of moving to. Factors to consider include:

Access to public transport
Proximity to schools
Proximity to grocery stores
Proximity to shopping centers
Proximity to recreational facilities
Proximity to libraries
Access to community centers
Proximity to places of worship

Should You Rent an Apartment or House?

Close to a third of families in Canada rent the properties they live. So if you are going the rental route, you'll need to take a look at all the information provided on renting your first home in Canada as a newcomer, the signing process for a lease in Canada and provincial-specific information regarding renting.

Signing a Lease

When you find a property and your application for a rental is approved, you'll need to sign a lease. But before you sign anything:

You must completely understand it
Make sure you understand what your rights as a tenant are
Find out whether you need to pay a deposit and how much this will be
Access support structures for newcomers in the province you are in

Finding a Home Rental

There are a number of ways to find a place to rent. Consider:

Asking people you know
Regularly check newspaper and online advertisements and Community notice boards
Take a look at property rental sites
Check in with organizations that help immigrants
Seek the help of a rental agency
Scout for a property by checking your neighborhood

What Landlords Will Need From You

Canadian landlords may ask you for:

References to prove that you'll be a good tenant
Information on your place of employment
Your credit history
Your current income

An immigrant-serving organization may be able to assist you:

Don’t have a job yet
Have no references
Don’t have a Canadian credit history

Moving Into Your Rental

Once you find your ideal property to rent, you will have to sign a lease agreement with your landlord. This is a written rental agreement which states the terms and conditions of your rental. Note that this is a legally binding document, so don't sign unless you understand what is stated. If you are unsure, rather ask a friend, family member, legal representative, the landlord or someone from an immigrant-serving organization to go over it with you. This document is likely to include information on:

Your rental deposit
Parking facilities
Garbage collection
Damages

Rent Payment

Rent due is usually paid to the landlord or property manager. Payment is usually due on the first of each month. Rent can be paid either in cash or using post-dated cheques. Some landlords may request a certified cheque for the first and last month. Remember to ask your landlord for a receipt as proof of your payment.

Note that rent may include:

Heat
Water
Electricity

Expect an Annual increase in Rent

Your landlord should give you three months' notice of any increase in rent.

Moving Out of Your Rental Property

When you decide to move out of your rental, you will have to give written notice of your decision to do so. The period of notice will depend on the province you find yourself in.

Get Ready to Settle in Your Home Amongst the Maple Leaves

Your new beginning comes with a brand new setting for you and your loved ones. And whether it's a rental or your own home you're opting for, make sure that you research each process thoroughly. Remember that for the next two years, only Canadian citizens and Canadian Permanent residents will be able to buy residential properties. So when choosing your pathway to the Great White North, it's a good idea to go with one that will quickly help you obtain Canadian PR.

Moving to a country is beyond daunting, with all the paperwork involved. That's why our Regulated Canadian Immigration Consultants (RCIC) are always at hand - to take the fuss out of your visa and immigration journey! Now let's get you on your way to living the life you deserve in Canada.

FAQS

What are the Best Ways to Get Permanent Residency in Canada?

The Express Entry System is one of the most popular pathways to Canadian Permanent Residency, largely due to its speedy processing times. The Entry system includes three programs:

The Federal Skilled Worker Program
The Federal Skilled Trades Program; and
The Canadian Experience Class

The Provincial Nominee Program is the Canadian government's agreement with its provinces which allows them to nominate immigrants who wish to live, settle, and work in that particular province and immigrate to Canada. To obtain a visa through the PNP, you'll have to choose a province to live in and then apply for a nomination.

The province then considers your application according to its immigration and labour needs, as well as your intention to settle there. Immigration is vital to boosting local economies and development in key sectors and supporting an aging population.

What Constitutes a Residential Property in Canada?

The term residential property refers to any property situated in Canada. This could be:

A detached house or similar
A part of a building that is a semi-detached house, rowhouse unit, residential apartment unit or other similar
Any property which is not able to be moved