New To Canada: Tips On Buying Pre-Construction Property
Planning a move to a new country is very exciting and requires plenty of preparation. Finding property as a newcomer can sometimes be tough especially when you are new to a city, but with the right research, it’s possible and you’ll be sure to find the perfect home. This article will cover tips on how non-Canadian residents can purchase pre-construction property.
Investing In A Foreign Property
Canadian cities like Toronto have been welcoming individuals from all over the world for decades, turning it into the ethnic and culturally diverse city that it is today. Many non-residents move to the city each year, lured in by its environmentally conscious way of living, amazing scenery and city lifestyle. With the Toronto condo development market soaring, this is a highly lucrative and exciting time for those looking to buy a pre-construction condo.
If you are currently considering a move to Toronto in the next few years and are interested in investing in foreign property, there are many considerations that you should keep in mind. Purchasing property, especially pre-construction property, as a non-resident is not impossible but does require preparation and research.
Do Your Research
Like with all prospective pre-construction home buyers, whether you are a Canadian resident or not, when looking to purchase a property in a new city you will need to do extensive research to make sure that the process goes smoothly. A great tip is to consider factors such as location, necessary local and building amenities, finding the right real estate agent, property values and financial processes.
Most homeowners want to ensure that the neighbourhood in which their new home will be situated will have low crime rates, good schools and great transportation facilities. Thankfully, Toronto offers many of these but it is certainly beneficial to put a little extra time getting to know the different neighbourhoods in the city before looking for a pre-construction property.
The purchasing process of pre-construction condos may be different in Toronto than it is in other parts of the world. So, it is important to know how you will finance your purchase. Typically, when buying a pre-construction property as a non-Canadian resident you may be required to pay the following fees: unit cost, land transfer tax, development charges, interim occupancy fees, legal fees, applicable taxes, non-resident speculation tax, HST and Tarion Warranty Fees. The deposit structure for newcomers to Canada is also slightly higher at 35% of the unit cost.
Getting A Mortgage: Do I Qualify?
The good news for non-residents is that the application process for a mortgage is relatively straight-forward and most Canadian banks won’t make you jump through too many hoops when looking for mortgage approval.
As long as you meet requirements, you should have no issue getting a mortgage for your new pre-construction condo. However, you will need to have to a Canadian bank account so it is advised that you are residing in Canada when you apply for a mortgage. Below are the main requirements that most Canadian banks and lenders look for when approving a mortgage for non-residents:
- A 35% down payment
- Reference letter from a bank
- Employment letter verifying income
- Three months of bank statements
- A Canadian credit check
It is important to note that all non-Canadian residents are also eligible for similar interest rates as Canadian citizens provided that your home country has a tax treaty with Canada. If not, you will be required to pay a fixed interest rate.
Purchasing From Abroad
Oftentimes, when purchasing from abroad it may not be possible to travel each and every time that you want to view a new pre-construction development that you are interested. With advances in modern technology, however, it has become so much easier for non-residents to look for and purchase a new pre-construction property while abroad. There are many real estate agents who are extremely willing to work with non-residents and help them make the process of buying from abroad easier. Features such as interactive virtual tours allow you to view how prospective pre-construction condo units making it easy for you to visualize how your new property in Canada might look.
You’re Ready To Move
Planning a move to a new country is also going to be an extremely exciting time for you and your family especially if you are planning to buy a pre-construction property. With so many pre-construction condo developments happening in Toronto over the next few years there will be plenty of opportunities to find the perfect home for you in Canada. With the right preparation and help from the right real estate agent, when the time comes for you to move you will be ready for your new Canadian adventure.