Investing in Canadian Real Estate: A Guide for Expats

Published on September 30, 2025 and written by Cyril Jarnias

Real estate investment in Canada represents an attractive opportunity for expatriates looking to diversify their assets and plan for their future. However, this type of project requires careful preparation and a good understanding of the specifics of the Canadian market. This guide will walk you through the different steps and essential considerations for successfully investing in Canadian real estate as an expatriate.

The Canadian Real Estate Market: An Overview

The Canadian real estate market is known for its stability and long-term growth potential. However, it’s important to note that since January 1, 2023, a new law imposes certain restrictions on the purchase of residential properties by non-Canadians for a two-year period. This measure aims to curb real estate speculation and stabilize housing prices in the country.

Main characteristics of the Canadian real estate market:

• Stable market with consistent long-term price appreciation
• Strong rental demand in major cities like Toronto, Vancouver, and Montreal
• Strict regulations to protect investors and tenants
• Transparent and well-structured purchasing process

Legal Considerations for Expatriate Investors

Before embarking on real estate investment in Canada, it’s crucial to understand the legal framework that applies to foreign buyers.

Main restrictions for foreign buyers:

• Temporary ban (until January 1, 2025) on purchasing residential properties with 1 to 3 units for non-Canadians
• Exceptions for certain categories of foreign buyers (international students, skilled temporary workers, etc.)
• Possibility to invest in commercial real estate or properties with more than 3 units

It’s highly recommended to consult with a lawyer specializing in Canadian real estate law to ensure you meet all legal requirements and benefit from any applicable exceptions.

Administrative Procedures for Real Estate Purchase

The real estate purchasing process in Canada is generally well-structured and transparent. Here are the main steps to follow:

1. Property search and selection – Define your investment criteria (property type, location, budget) – Engage a local real estate agent to assist with your search

2. Purchase offer – Prepare a detailed purchase offer with your agent’s assistance – Negotiate terms with the seller

3. Inspection and appraisal – Arrange for a professional property inspection – Obtain an independent property valuation

4. Financing – Explore financing options available for non-residents – Obtain pre-approval for a loan if necessary

5. Purchase finalization – Sign the deed of sale with a notary – Pay closing costs and applicable taxes

Financing Your Real Estate Investment

As an expatriate, financing your real estate investment in Canada can be more complex than for a resident. Here are some options to consider:

Financing through a Canadian bank: – Generally more difficult to obtain for non-residents – Higher down payment requirements (often 35% or more) – Potentially higher interest rates

International financing: – Possibility to obtain a loan from a French bank specializing in expatriate credit – Often more favorable terms for expatriates – Sometimes longer and more complex process

Self-financing: – Simplest option but requires significant liquid assets – Avoids complications related to cross-border loans

It’s recommended to consult with a mortgage broker specializing in real estate loans for expatriates to explore all available options and find the solution best suited to your situation.

Tax Implications of Real Estate Investment in Canada

Real estate investment in Canada as an expatriate involves important tax implications to consider:

Rental income tax: – Rental income is taxable in Canada – 25% withholding tax on gross rental income for non-residents – Option to file a Canadian income tax return to benefit from applicable deductions

Underused housing tax: – Annual tax of 1% of the property value for vacant or underused housing – Applicable to non-resident and non-Canadian citizen property owners

Capital gains tax: – Taxation of capital gains realized upon property sale – 25% tax rate for non-residents

Foreign asset reporting: – Obligation to report your Canadian real estate assets in your country of tax residence

Investment Strategies for Expatriates

To maximize the potential of your real estate investment in Canada, consider the following strategies:

1. Rental investment: – Target major cities with strong rental demand – Prioritize well-located properties near transportation and services

2. Purchase with return to Canada in mind: – Invest in a property you could occupy upon your return – Choose a location based on your future plans

3. Portfolio diversification: – Combine different property types (residential, commercial) to spread risk – Invest in multiple cities or provinces to benefit from different markets

4. Investment in Canadian REITs: – Option for indirect investment in Canadian real estate – Allows for delegated management and easy diversification

Remote Management of Your Real Estate Property

Managing a real estate property remotely can be complex. Here are some tips to facilitate this management:

• Engage a professional property management agency
• Use online management tools to track your income and expenses
• Build a local network of professionals (real estate agent, accountant, lawyer) to assist you
• Plan regular visits to your property if possible

Risks and Precautions to Take

Like any investment, Canadian real estate carries risks that should be anticipated:

Market-related risks: – Real estate price fluctuations – Interest rate changes – Shifts in rental demand

Legal and tax risks: – Changes in foreign ownership legislation – Modifications to tax laws

Management risks: – Difficulties related to remote management – Issues with tenants

To minimize these risks, it’s essential to: – Thoroughly research the local market before investing – Diversify your investments – Maintain a cash reserve for unexpected expenses – Stay informed about legal and tax developments

Conclusion

Investing in Canadian real estate as an expatriate can be an excellent opportunity to diversify your assets and plan for your future. However, this type of investment requires careful preparation and a good understanding of the specifics of the Canadian market.

By following the advice in this guide, surrounding yourself with competent professionals, and remaining vigilant about market and regulatory developments, you’ll maximize your chances of success with your Canadian real estate investment.