Widely regarded as one of the most beautiful cities in the world Vancouver has consistently been voted as one of the most desirable cities to live for quality of lifestyle. With so much economic uncertainty in the world investors from around the globe are choosing Vancouver and surrounding areas as their safe harbour for their real estate investments.
With mountain ranges to the north and south and the Pacific Ocean to the west, useful additional development land has become limited and existing prime properties can only increase further in value in line with growing demand. You too can share in this growth with a wise and considered investment!
The following information has been compiled as a brief and basic guide for non-resident investors:
1: Initial Contact. An easy and simple process of determining your investment goals. I will then assist you in any way I can at no charge until your goals are satisfied.
2: Research. Based on our discussions, I will find suitable properties in line with you investment requirements.
3: Offer to Purchase. Should you decide to purchase any one of the properties offered, I will prepare all paperwork and contracts and make sure you are protected by the necessary legal requirements. I will negotiate and act for you in your best interests and in accordance with your instructions.
4: Accepted Offer. After acceptance of the offer I will attend to the 'removal' of any Subject clauses in the contract by the due date to ensure that we have a duly completed firm and binding contract. At this stage a 5% deposit is required on the purchase.
Note: If your offer is subject to an 'Inspection', it is recommended that you attend this personally. (Obviously for non-residents this may not be viable.)
5: Completion. Shortly before completion your lawyer (I can provide you with a list of local lawyers if you require) would complete the final paperwork required to transfer title to your name on the completion date.
6: Possession. I will obtain the keys for you on the possession date if necessary. If your plan is to rent your property, I would hand over the keys to the property management company selected by you.
Canada's financial institutions normally require a minimum down-payment of 35% of the purchase price for Non-Residents. Lenders may finance buyers from the US with 30% down.
Mortgages are usually amortized over 25 years and can be on a variable rate or a fixed term rate for 1,2,3,4 or 5 years. For the latest mortgage rates click here. During the subject period of the contract your mortgage broker would negotiate the best rate and get a firm commitment from the bank before entering into a binding contract. The lender will appraise the property before providing the mortgage commitment.
All values are in Canadian dollars.
Real Estate Agent: There is no cost to you the buyer. Real Estate commissions are paid by the seller after completion of the contract.
Lawyer: A lawyer or notary is required to complete the transfer and register the title in the buyer's name. The cost is approximately $800.
Building Inspector: An inspection report may be required depending on the age of the building. The cost is approximately $300.
Property Transfer Tax: Property in British Columbia is subject to Property Transfer Tax (PTT) which is 1% on the first $200,000 and 2% on the remainder. (First time Canadian buyers may have an exemption.)
Property Taxes: Property is also subject to a local property tax of approximately 0.5% of the purchase price which is normally paid once a year.
Strata Fees: A monthly strata fee (condominium fee) is charged for insurance and maintenance of the building. This varies with each building.
Property Management: A rental agent will be required to lease the property (normally one year at a time), collect the rent, control repairs and provide monthly statements to the owner. The fee for leasing is normally 50% of the first month's rent and 5% of the rent each month thereafter.
Income Tax: It is recommended that a tax return for the property is filed each year to the CRA (Canada Revenue Agency.) The cost to file the necessary forms is approximately $300 to $400 each year and the monthly remittance of non-resident tax is approximately 25% of the gross rental income. This withholding tax is refundable upon filing the tax return and the net taxes are often minimal as the mortgage interest, property taxes, repairs and maintenance, insurance, utilities, strata fees and accounting fees can be deducted from the gross rental income.
There is the option of filing an NR6 form to reduce the monthly withholding taxes. When purchasing property in Canada as a non-resident, visit the Canada Revenue Agency (CRA) website at http://www.cra-arc.gc.ca/tax/nonresidents/individuals/nonres-e.html for information on taxes when selling a property.
Accountant: Most non-resident investors would have an accountant prepare and file the annual tax return with CRA. For one property the cost would be approximately $300 to $400.
Bank Account: An account should be established with one of the major banks. Funds can then be sent by wire transfer to Canada. Rental income would be deposited to the account by the property manager.
Rental rates vary considerably, depending on the location, size, age and amenities of the property. If you have a specific property in mind, let me know so I can research what you could realistically expect from the rental income.
Good location property, has always been and still is, a sound and secure investment with well above average returns. I believe Greater Vancouver is an excellent location. I welcome your enquiries today and the pleasure of your success in the future.