Questions To Ask Before Buying A Home In Canada
If you have some questions about buying a home in Canada, have a look at this list of questions to ask before buying a home in Canada. Consider it your step-by-step guide to your plans for the purchase of residential property.
Buying a new home is always an exciting time in many people's lives, but it can be difficult if you are confused by the process. There are so many things you can do to make your purchase much easier and smoother for you, and doing your research is one of them.
What is the housing market like in Canada right now?
Canada has seen a significant rise in housing demand in some areas, which has led to a high increase in home prices all over the country, but it hit the smallest towns the hardest. The real estate market is starting to cool down with tons of new construction popping up all over the place, so prices have started to become lower, but they still haven't reached pre-pandemic prices in most of the country.
Also be aware that some larger metropolitan areas have, in recent years, instituted a non-resident speculation tax to prevent absentee owners from driving up house prices by driving down the supply of homes available.
Smaller cities such as Winnipeg, have now become a true buyer's market, thanks in part due to the higher interest rates implemented by the Bank of Canada.
Is now a good time to be buying a home in Canada?
With prices coming down, now is a great time to consider buying a home in Canada, but you need to make sure you are buying it in a good area. Home values have inflated in some areas, and you don't want to overspend on your home when you can wait a year or so and end up saving tens of thousands.
A real estate agent who is local to the area is the best person to talk to about buying a home, and they will be able to let you know whether or not the home you want has a price that is overly high for the area.
Are there any restrictions for home buyers in Canada?
In the past year the Canadian government has passed a law that prohibits non-Canadian residents, foreign buyers, foreign investors (or corporations) from home ownership until they have lived here for two years. If you are currently living in another country, even the United States, you will be unable to purchase a new home in Canada, but that shouldn't stop you from looking for one.
Currently this new Canadian Law is set for a limited time, and due to end in 2025.
The home-buying process in Canada can sometimes take a while, and it's always good to get a good idea of what the home prices are like in the area you are considering.
Are there any exceptions to this new law?
There are some minor exceptions to this law that might apply to you or your family members when it comes to this law. If you are a refugee of another country or if you are the spouse of a Canadian resident, you may purchase a property without being a resident for two years. These are the only significant exceptions to the law, and there are a number of strict penalties for those who choose to break it.
Does the Law apply to all Homes in Canada?
Another exception to the law might be beneficial for anyone looking to make more significant real estate investments. The law defines “residential homes” as a building with three or fewer homes, so larger multi-family buildings and apartment buildings are still available for purchase to those outside Canada.
What Types of Homes are For Sale in Canada?
Canada has a wide variety of homes for sale all over the country, so you can find the perfect home that fits your needs and budget. Single-family homes, multi-family apartment buildings, and luxury-style homes are available in many major cities.
Are there any Tax Rebates for First-Time Homebuyers in Canada?
You can receive several rebates as a first-time home buyer in Canada that can help you with your loan payment and rebates that can give you money back on your annual taxes. The Home Buyers Tax Credit allows new homeowners to claim up to $10,000 on their taxes and receive a rebate of $1500 back to help with their new mortgage payments.
The First Time Home Buyers Incentive is designed to allow for an interest-free loan from the government of anywhere between 5%- 10% of the home's final purchase price, which will be applied to your home down payment.
Do I Need to get an Inspection on the Home I want to Purchase?
In Canada, a home inspection is not required by law, but it is highly recommended. If you are getting an inspection, make sure you are looking for a home inspector that is certified in the area or with the provincial board of inspectors to ensure your inspection is as good as it can be. Some lending companies have clauses in their contract
that state you do need to have an inspection done before the final paperwork is signed for your home, and this is just in case any significant issues with the home arise.
Do I Need to Work with a Bank, or can I Choose a Private Lender for my Loan?
There quite a few popular canadian banks, and many people prefer to choose their bank as their lender because they are comfortable with them, but you can choose a private lender instead if you want. A private lender can often offer you lower rates for your payments, and a mortgage broker will be able to help you find the best mortgage rates by comparing multiple lenders.
There are many lenders that serve specific demographics (like those who have just moved to Canada or those who are self-employed), and they will be able to provide a bit of extra help through the lending process.
What Taxes will I have to pay for my Home if I am a new owner?
Every home sale in Canada is subjected to certain taxes, but it may be possible to become exempt from some of them. This will all depend on where you are purchasing your home and the type of residency you have.
Talk to a financial advisor or a tax expert in Canada about what your taxes might look like when you file them. They will be able to let you know what you can expect for your first-time filing as a new homeowner in Canada.
Some taxes you will NOT be able to avoid are Land Titles Transfer Taxes and Property Taxes. These are payable by canadian citizens, permanent residents of Canada and foreigners alike, on all residential properties.
How Long will it Take to Finalize my Home Purchase?
The average time to go from start to finish with a home sale can vary quite a bit, depending on the situation, but the average time is around 30-60 days. There is paperwork, inspections, and communication that need to happen before everything can be finalized.
Should I Consider Building a Home over Buying a Pre-Existing Home?
Canada has always been known for being one of the world's major producers of lumber, which means there is home-building going on all of the time. If you have thought about building a new home in Canada over buying a new home, the only real downside would be the wait.
New construction companies are always popping up, but it is hard to keep up with the high demand for homes. You might end up paying about the same as you would for a pre-existing home, but the average build time is approximately six months to a year so consider buying if you don't have a place to stay for an extended period of time.
How can I Make my Home-Buying Process as Smooth as Possible?
Real estate agents are there to help you find a home, but they can also help you through the entire process by providing you with access to their experts. They might be able to recommend the best inspector in the area or point you in the right direction to get a better rate on your mortgage.
It's a good idea to consider hiring one to help you out as soon as you decide you are going to buy a home. Real estate experts who is local to the area will be able to help you from afar using email and live video chatting, so you don't need to worry about being in town to purchase a new property.
All REALTORS are members of the Canadian Real Estate Association, and trained in the area of helping buyers.
Another step that will help is to get a mortgage pre-approval from a Canadian lender.
Is Canada a Good Place to Buy a New Home or Property?
Canada has been highly ranked by many reputable sources for its livability, cleanliness, and happiness, which has made it a popular place for many people to consider when they are moving from other countries. It is a fantastic choice to consider for investment properties, and it's an ideal spot to move to if you want to start fresh.
One thing that adds to the desirability of canadian homes are the low exchange rates for canadian dollars
Another is the relatively low average home prices in many areas of the country.
The country has a great economy, and new job opportunities are coming up all of the time, so it's the perfect place to think about if you are looking to move.
Overall, Canada is a great place to buy a home, and it's a good place to put on your list if you are considering moving to a new country. The home-buying process in Canada is relatively smooth but working with a professional is a great way to make it a bit easier for you. Consider making Canada your new home, or have a look at some of the great properties online today that are available for sale to non-residents.
About the PublisherBo Kauffmann is a residential real estate agent with over 18 yrs experience in helping buyers and sellers achieve their goals. Inducted into the REMAX Hall of Fame in 2010 and receiving the REMAX Lifetime Achievement Award in 2019, Bo has sold over 500 houses and condos in the Greater Winnipeg market. He is an accredited buyer representative (A.B.R.) and a Luxury Home Marketing Specialist. Bo provides exceptional service to First-Time Home-Buyers, Seniors looking to downsize and Home Sellers of all ages. He can be reached easily By E-Mail or call/text him Call/Text Here
Never miss an episode of our real estate podcast. Install our FREE Podcast App available on iOS and Android. For your Apple Devices, click here to install our iOS App. For your Android Devices, click here to install our Android App. Check my videos on Youtube