Why Canada is a popular option among investors.
Canada: A Real Estate Investors’ Paradise
Unlike most countries, you do not have to be a Canadian citizen or have a permanent resident status to own or buy property in Canada. Non-residents, too, have the privilege of owning rental property in the country. Apart from filing annual tax returns with the Canada Revenue Agency (CRA), there is little trouble that one will have to go through in order to own property as a non-resident in Canada.
Are you curious to find out what else makes the Canadian real estate market such a favourite among investors? Read on to find out some things which make the real estate market in Canada unique.
Each province in Canada has a different transfer tax requirement when you buy a new property. 1% provincial tax generally applies to the first $200,000 paid, while the rate goes up to somewhere around 2% on the remaining balance. However, exemptions are made for people who are investing for the first time in Canada.
Tax on Rental Property
25% of the gross property rental income is remitted due to the Canadian Income Tax Act annually. Non-residents are also given the chance to elect to pay this amount after the completion of a form named NR6. However, previously paid taxes can be reclaimed in case net losses are incurred by the property.
Selling Property in Canada
If you are an American resident and you sell your property in Canada, you must report your profits to the Internal Revenue Service (IRS). One plus point is that the gain or profit can be claimed as foreign tax credit in case it was taxed in Canada.
If you sell a property in Canada which was declared as your principal residence as a Canadian resident, tax will not be applied to the profit you receive when you sell the property. Any of your properties can be declared as your principal residence if you live in it.
To learn more about the Canadian real estate market for investors, contact Nav Sidhu.