Canadians Buying U.S. Properties

Real estate in Canada may no longer be cheap, but real estate south of the border is on sale.  Canadians know it, and are using their powered-up loonie to snatch the bargains.

Anecdotally speaking, Canadian interest in U.S properties has doubled in the last year.  On our site too, Canadian inquiries about U.S. mortgages have soared recently. 

We continue to hear of U.S. homes selling for fractions on the dollar.  Our partners in Florida, for example, tell us that home inventories there keep rising.  As a result, average "days on market" are now 4-months+ in many places.  Most sellers are very open to negotiation.

Many Canadians are even finding values in beachfront, ski-resort, or golf-resort condos, and renting them out when they're not there.  (Be warned, the rental market down there is tough right now).

The downpayment for Canadians seeking U.S. mortgages ranges from 25% to 10% depending on the rate and terms.  Closing costs are often 2-3 times what they are in Canada, however--where 1.5% is the norm.

For a good overview of the U.S. mortgage process, talk to a top U.S. mortgage planner.  If you need a referral drop us an email.

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Side Bar:  If you own U.S. real estate and have worldwide assets over $2 million you're subject to U.S. estate tax when you die.  Yes, even if you're a Canadian citizen and resident.  Fortunately there are solutions according to the Financial Post.

In addition, if you generate U.S. rental income you have to report it in both countries.  You won't be double-taxed, however, according to the Edmonton Journal.

Comments

[Garth Hamilton]

Hi. I was wondering. Can Canadians get US mortgages if they have had a bankruptcy?

[Tiffany]

I heard that you can get a mortgage in the states by a Canadian company and therefore pay your mortgage in Canadian dollars. Do you know who this company is?

[Canadian Mortgage]

Hi Tiffany, I haven't heard of a particular company doing this, but it possible there is one. I know a few of the banks were entertaining the idea. If you find out we'd appreciate the tip. Cheers, Rob

[scott sheely]

You can get a mortgage in the US without any credit check in the US or Canada.

Scott

[Jen]

How does a Canadian citizen buy real estate in the US? Do you have to be a US resident? Can I just go to a bank in the US, apply for a mortgage & when approved, buy a place? It can't be that easy....

Thanks!

[J.P.]

There are no restrictions on Canadians buying U.S. property but there are time limits on how long you can live in the U.S. You have to get a mortgage through an American lender. You can get pre-approved ahead of time. You might want to talk to a good bank or broker down there for more info. J.P.

[Darren]

If I borrow money against my principal residence (home equity loan)to purchase a property in the US, is the interest tax deductible?

[Canadian Mortgage]

If it`s an investment property you`re buying then the answer is probably yes but talk to an accountant to confirm the details. Check out this link as well:

http://www.centa.com/CEN-TAPEDE/archive/Week-of-Mon-20080211/003782.html

[Marilyn]

I have heard advertisements for recreation proerties that claim to be "RRSP eligible". If I want to buy a property in the US just for my own use, can I use my RRSP money?

[Canadian Mortgage]

Hi Marilyn, We'll have to defer this one to a tax advisor. Sorry!