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Should I buy or rent in Canada when emigrating?

Posted by By Bournes International Moves - November 20, 2014

buy or rent in CanadaWhatever the reasons for your move, there’s no escaping the fact that you’ll need a home to buy or rent in Canada. Ultimately, where you decide to live will depend upon a number of factors – the length of your stay, the types of amenities you need to be within reach of, whether you’re moving alone or with family – the list is endless. So where do you start when planning to buy or rent in Canada?


Buying a house in Canada

Buying a house in Canada is a completely different process to buying a house here in the UK. Firstly, the regulations surrounding property purchase vary throughout Canada, so you need to know where exactly you’re going and find out the regulations that apply to that area – for example, in British Columbia, New Brunswick, Newfoundland, Nova Scotia, Ontario and Quebec there are no restrictions on foreign ownership as long as you spend less than six months per year in the country.

Secondly, Canada differs from the UK and elsewhere in that gazumping is pretty much unheard of. Once your offer is made, you will then be required to pay a deposit (which is refunded if the sale falls through). Then, once the offer is signed by both parties) and provided no conditions of sale are broken) the sale will proceed.

However, before you even consider making an offer on a house, you need to have a good agent who will be able to represent you and sort out the financial aspects of the sale on your behalf. Much like here there will be a fee for this service.

Transaction costs for sales will vary according to province, but generally speaking they are usually somewhere between 4.7 and 11% of the overall property price. You should also be aware that a 7% Goods and Services Tax and a Provincial Sales Tax of up to 10% will likely be included in the asking price of any home you buy – unless you’re choosing to settle in Alberta, which is the only Canadian province not to levy the PST.

Before you even begin your search for a new home, you need to make sure you’ve put in place provisions for your visa. Whilst it’s not always necessary to have a visa when visiting the country (non-residents can spend up to six months per year in Canada), those wanting to live permanently in the country must look into their visa process early. Those wanting to permanent residency must apply for landed immigration status, as well as matching other criteria. This can be a lengthy and complicated process, so it’s often wise to consult a professional in the matter as any mistakes made can affect your application.

And finally, it goes without saying that as with any property purchase, you need to make sure your finances are in order well in advance. Make sure you look into all the little things as you would here – transfer tax, appraisal fees, inspection fees, insurance costs, closing fees and any legal fees you will incur and factor all of this into your overall expenditure.

If you’re looking into securing a mortgage for your purchase then try to put as much as you can afford towards your down payment – the bigger you make this, the smaller your monthly mortgage repayments will be. Anything less than 25% of the purchase price means your mortgage loan will have to be insured with a mortgage insurance company and this can up your fees considerably.

Renting a house in Canada

Renting, you’ll be pleased to know, works pretty much along the same lines out there as it does here. If you’re used to renting here, then there aren’t many differences – if any – in the way that renting in Canada works.

For first-time renters, it’s a fairly simple process. Generally, you’ll find the property you want through an internet or local paper search. After contacting the landlord to gain more details, you’ll be able to view the property and ask more questions. Always remember to look thoroughly around the place and speak out if there are any causes for concern (mould or damp patches, electrical appliances that don’t work, dripping taps, etc).

If you’re happy with the place and the price of rent and want to proceed then you’ll be subject to vetting by the landlord. This will include gaining references from any of your previous landlords, plus a credit check which you may be required to pay for.

Much like they do here, rental prices will differ according to your chosen location, as will the requirements of your landlord – some will allow pets and smoking outside, others will be stricter and may even place restrictions on how many guests you’re allowed over at any given time. All of this should be discussed when you meet the landlord and any concerns raised and dealt with before the contract is signed.

For more detailed information on renting for the first time in Canada, you can read this http://www.cmhc.gc.ca/odpub/pdf/66164.pdf or click http://www.cmhc-schl.gc.ca/en/co/reho/yogureho/fore/index.cfm

 

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Topics: Buying/Selling a House, Canada, Renting

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