Foreigners can legally buy property anywhere in Canada, including Toronto. You don’t need to be a resident or a citizen. Non-residents can buy a home, a condo, or invest in multiple properties. However, owning real estate here doesn’t give you any immigration rights. If you want to live in Canada long-term, you’ll still need to apply through the proper immigration channels.
Here’s a breakdown of what non-Canadian buyers need to know before purchasing property in Toronto.
Do You Need Permission?
No special permission is required. Non-residents can buy property on the same terms as Canadian citizens. But there are extra tax costs and paperwork involved. One of the biggest financial points to plan for is the Non-Resident Speculation Tax. It applies to most residential purchases made by non-residents in parts of Ontario, including Toronto. This adds 15 percent to the purchase price.
There are some exceptions and rebates, particularly if you’re planning to stay in Canada long-term or if your spouse is a Canadian citizen. A tax lawyer can help determine if you qualify for a rebate.
Hire the Right Help
Work with professionals who have done this kind of deal before. Your main team should include:
- A real estate agent
- A mortgage broker (if you need financing)
- A real estate lawyer
- A tax consultant
They’ll help manage the process, explain the paperwork, and point out the costs you might not have thought of—like insurance, inspections, and legal fees.
Property Taxes and Owning Costs
Besides the upfront foreign buyer tax, you’ll need to pay annual property taxes and income tax on any rental income you collect from a tenant.
If you sell the property later, there’s a withholding tax of 25 percent based on the sale price. You’ll need to file tax forms when this happens, or you could face penalties.
What Lower Budgets Can Actually Buy You
Many assume that owning property in Toronto automatically means spending well over a million dollars. But some buyers have found smaller condos, older homes, or fixer-uppers in pockets of the city that cost far less. Listings like studio units near transit lines or one-bedroom condos in older buildings occasionally fall below the half-million mark.
For buyers exploring entry-level investments, there are real estate listings like houses for sale in Toronto under $500,000 that might be suitable. These properties may need some renovation or be located in less central areas, but they allow you to start building equity in the local market, and can support for obtaining residency.
Can You Get a Mortgage?
Non-residents can apply for a mortgage in Canada, though the rules are tougher. Most banks ask for a down payment of at least 35 percent. Lenders limit mortgages to 65 percent of the purchase price for overseas buyers.
Be prepared to show:
- Bank statements from the last three months
- A letter from your current bank
- Tax documents
- Credit reports
Each lender has its own rules. Some may also interview you by phone. Though interest rates are generally on par with resident mortgages, not every bank will finance non-resident purchases.
Don’t Forget Closing Costs
These extra fees often catch people by surprise. Expect to pay:
- Property transfer tax (1 percent on the first 100,000 Canadian dollars, then 2 percent)
- Legal fees
- Inspection fees
- Home insurance costs
- Appraisal fees
- Sales tax on mortgage insurance (if required)
Home insurance is technically optional in Canada. But if you’re getting a mortgage, lenders require proof of coverage. Non-residents sometimes face higher premiums or have fewer provider options. Insurance brokers can offer multiple quotes from different companies, which may help.
Should You Inspect the Property?
Yes. Always get a home inspection before the sale is finalized. It’s best to make this part of the purchase contract. Sellers might provide their own inspection report, but it’s smart to hire an independent inspector to check for issues with the structure, heating systems, the roof, and the land around the building.
Go with the inspector if you can. It helps to hear about potential problems firsthand.
Bank Accounts, Deposits, and Having Funds Ready
To make an offer in Toronto, you usually need to provide a deposit of 5 to 10 percent of the property price within 24 hours. This must be in Canadian dollars and come from a Canadian bank. So, opening a bank account in person beforehand is essential.
Keep in mind that transferring large amounts of money from abroad can take time. Exchange rates can also change quickly. It’s better to have your funds ready to reduce the risk of timing issues.
Do You Have to Be in Canada to Buy a Home?
You don’t have to be physically in Canada to search for or even purchase a property. Many buyers handle much of the process remotely through their agent and lawyer. But you do need to be in Canada to open a bank account, which is required to complete the purchase.
For managing the property after the purchase, especially if you intend to rent it, you can hire a property management company. They’ll handle tenants, repairs, and rent collection. This service comes at a cost, but it can save time and avoid hassle.
Why a Lawyer Matters
Canadian real estate deals must involve a lawyer. They’re responsible for transferring the title and registering you as the legal owner. Make sure your lawyer has worked with international buyers before. They need to understand the tax and legal steps for someone who doesn’t live in the country.
Final Notes
Buying property in Toronto is possible for non-residents. But it requires planning, a higher down payment. Work with professionals who know the local market and the rules around international buying. Take time to understand taxes and closing costs so you don’t run into surprises.
And remember: owning property in Canada won’t qualify you for residency. If your goal is to move here, you’ll need to meet immigration requirements separately.
