As an international student in Canada, you may be interested in purchasing a home rather than renting a place to live. Canada is known for its high-quality education, open-minded society, and diverse career opportunities. This makes it to be one of the top destinations for studying abroad. While it may seem daunting to go through the home-buying process as an international student, it is possible to make it done with the right preparation and support!
In this article, we will provide you with all the information you need to know about – buying a home in Canada as an international student.
As of January 2023, the Canadian government has enacted a law that bans non-Canadians from purchasing residential real estate. The legislation states that non-Canadians cannot buy a home in Canada for a period of 2 years. However, there is still hope for international students!
The Act and Regulations provide exceptions for those international students who meet all the requirements:
In other words, it is still possible for international students to purchase a home if they have meet certain requirements!
International students in Canada can obtain a mortgage loan to help finance their home purchases.
Many local banks, such as Scotiabank and CIBC in Vancouver, offer newcomers mortgage options for students to buy a home in Canada. However, banks will apply more stringent requirements. Here are some factors that students should be mindful of:
Step 1 – Make a deposit at the bank
International students, it is required to deposit 35% of the sale price of the property.
Step 2 – Identification Verification
You will need a government-issued ID (with your current address) and your SIN number.
Step 3 – Proof of Income
To provide lenders (the bank) with your monthly salary and your ability to meet the debt servicing ratios, like an employment letter verifying income in Canadian or US dollars. However, students may not have a job, it may not be applied to all students.
Step 4 – Basic Financial Information
You will need to provide your credit score, mortgage pre-approval letter, bank statements, and list of your assets (local and foreign).
Step 5 – Down Payment Confirmation
There are multiple methods to prove your source of funds, it can be
Step 6 – Property Details
Your bank would want to see the details of the property you are buying. You can provide a final purchase and sale agreement, which is a signed contract between you and the seller.
According to the official BC government website, non-BC residents/ foreign buyers must pay a 20% tax on top of the property value in certain regions.
For example: If an international student would like to purchase a $1,000,000 house in the Vancouver area, he or she may need an additional $200,000 as the Non-Resident Speculation Tax (NRST).
Here are the areas that include non-resident speculation tax (NRST)
Buying a home as a student in a foreign country may have a lot of things to concern about. There are multiple reasons why buying a home as an international student would be beneficial:
However, buying a home as an international student in Canada may be risky as well, and here are some reasons you may need to consider it before buying it:
Buying a house in a foreign country involves many considerations and can be a complex process. For those who are unfamiliar with Vancouver, we have created a separate blog that provides a detailed overview of the cost of living in Vancouver, specifically tailored to help you gain a better understanding of the city. We have also compiled a list of universities and colleges in Vancouver to provide more educational opportunities that may interest you.