How Can International Student Buy a Home in Vancouver, Canada? [Tips in 2023]

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.

Can International students buy property in Vancouver, Canada

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:

• are enrolled in a program of authorized study at a designated learning institution
• have filed income tax returns for each of the 5 taxation years
• have been physically present in Canada for a minimum of 244 days in each of the 5 calendar years preceding the year in which the purchase was made
• purchase a property for a price not exceeding $500,000

In other words, it is still possible for international students to purchase a home if they have meet certain requirements!

Can International students get a mortgage in Vancouver, Canada?

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:

• High minimum down payment requirement: The banks may require a higher minimum down payment than other local Canadians. For instance, Royal Bank can require a minimum down payment of 35% or more, and may need to verify income and international credit history with your bank in your home country. 
• Limited income and credit history: Being a student, you may not have sufficient income proof to support that you are able to pay back the loan. Moreover, students tend to be younger, and they may not have the time to develop a strong credit history to get their mortgage approval.    

What is the process for international students to get a mortgage in Canada?

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

• a statement of savings or investment: a document that proves the funds you use for your down payment are liquid (meaning they can be easily accessed).
• a gift letter (gifting down payment): a written statement confirming that funds given to a borrower for a down payment are a gift rather than a loan that has to be repaid.

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.

Do international students need to pay extra property tax for buying a home in Vancouver, Canada?

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)

• Capital Regional District (CRD)
• Metro Vancouver Regional District
• City of Abbotsford
• District of Mission
• City of Chilliwack
• City of Kelowna
• City of West Kelowna
• City of Nanaimo
• District of Lantzville

What are the benefits and drawbacks of buying a home as an international student?

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:

• It can provide a stable living situation for the students and they don’t need to go for rental hauntings or got scams from untrusted landlords.
• It could be an investment that students are able to rent out their place for an extra income source, this also provide students a long-term investment opportunity.

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:

• It may create more costs for you as a student to handle, like insurance and repair costs.
• International students face uncertainty regarding their future plans and may not want to be tied down to a mortgage.
• As Canada may not be the country that the students will be working in the future, and students may need to pay extra tax (i.e., empty homes tax) if they decided to work or travel back to their home country.

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.