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How To Buy a House in Canada as a U.S. Citizen

July 21, 2022
Exterior of a Brookfield Residential home in Playa Vista, CA

Can Americans buy a house in Canada? Absolutely. There are many benefits of buying in Canada, but you probably have some questions about the process, especially if you are property hunting from afar. It’s good to have a basic understanding about the process for buying a home in Canada.

Check out our guide to learn the basics for Americans buying a house in Canada and get a head-start on your property hunt.

The benefits of buying Canadian real estate

In addition to the wide variety of great locations available to you in Canada, U.S. buyers can financially benefit from investing in a Canadian property. Home values in Canada are increasing. Canadian housing prices and their associated values are expected to continue to increase, according to a Retuers poll. This is due to many factors, such as a strong labor market, population growth, and migration to big cities. You can rest assured that you are making a safe investment as a U.S. citizen buying property in Canada.

Additionally, finding a house in Canada opens up your search to Canada’s great amenities. These include a wealth of safe neighborhoods and an overall high quality of life. If you’re an outdoors enthusiast, you will also benefit from proximity to Canada’s many parks and recreational sites amidst the beauty of nature.

How house hunting works in Canada

Whether you are buying a home or a property to build on in Canada, the basics of searching for either are largely the same. Just like in the U.S., you can property or house hunt online through sites like zillow.com and realtor.ca. You can also search for a new build home or planned communities in which to build a home. Set the filters on these sites to the cities that appeal to you, select your property type, and search away.

Rendering of a street scene in a Brookfield Residential neighborhood in Canada

New home builders

You may also appreciate the help of a trustworthy home builder. Builders can direct you to popular development communities and assist you in selecting the best property or on which to build a new construction home or a new build home. Builders can also guide you through financing. Builders are also happy to help you find your new dream home in Canada. You will enjoy personal attention as these professionals work on your behalf to help you select the type of home that’s right for your needs and lifestyle, whether that’s a new single-family home, townhouse, duplex, or a condominium. 

Who can help

You don’t have to go it alone, and we wouldn’t recommend it if you are a first-time buyer in Canada.

  • Builder—Consider working with a reputable builder to purchase a new construction home. There are many benefits to building your ideal home from the ground up or buying a newly built home in a community. Today’s new housing communities offer many amenities. Builders have knowledgeable people on staff who can help you every step along the way.
  • Licensed real estate agent—Working with a realtor in Canada is similar to working with one in the U.S. Realtors can help search properties on your behalf. However, enlisting a real estate agent is unnecessary when you’re working with a new home builder that has a knowledgeable team to guide you.
  • Real estate lawyer—In Canada, real estate lawyers negotiate closing costs and terms when you are ready to buy. Working with a lawyer in this process is actually required.
  • Lender—As with mortgage arrangements in the U.S., you will need to identify and work through a lender in Canada. While your U.S. bank may be useful as a reference during the mortgage process, Canada requires the use of a Canadian bank if you are planning on a mortgage. 

As in the U.S., many professionals in the real estate industry have working relationships with one another. It may benefit you to reach out to one, like a builder or real estate agent, who can then introduce you to lawyers, lenders, and others with whom they have relationships.

Family room at Pickering in New Seaton by Brookfield Residential

Understanding Canadian financing

When buying a property in Canada, it can help to have a basic understanding of Canadian financing. As in the U.S., there are two ways in which you can pay for real estate in Canada: buying with cash or borrowing from a lender. Whichever you choose, the process for making a deposit is about the same as it is in the U.S. A deposit of an agreed upon home purchase amount will be expected, usually within 24 hours.

Canadian banks

If you are planning to finance your purchase through a bank, know that you need to go through a Canadian bank and not a U.S. bank. Also, be aware that Canadian banks may require a 35% down payment in order to finance property purchase. It can help, however, to investigate Canadian tax breaks offered for new or first-time homeowners. Any tax breaks or credits could help make up for the cash you need to put down in the beginning.

To qualify for a Canadian mortgage, you will need to supply documents that provide information about your financial history.

These documents typically include:

  • Pay stubs showing your income
  • Evidence of your credit history in the U.S. and Canada (if applicable)
  • A reference letter from your U.S. bank

Group of friends drinking and cooking

Taxes and legal fees

One of the most important things to know about closing on a house in Canada is that the buyer is responsible for their own closing costs. Closing costs will include a number of taxes, as well as the balance of the purchase price (what’s left after the down payment), along with legal fees, title insurance, a home inspection fee if you are buying a home, and an appraisal fee.

Because lawyers negotiate property purchase closings on resale homes, legal fees cover a variety of services, including preparing necessary documents, making disbursements, and registering the mortgage with the land titles office.

Ready to get started?

If you’re ready to get started on your property search in Canada, we can help. Buying property or a new home in Canada for U.S. citizens is possible and doable. Brookfield Residential is a North American home builder that specializes in custom built homes in the U.S. and Canada. We’re happy to advise you as you consider building or purchasing a new construction home in Canada. Contact Brookfield Residential today and learn about all the options that are available to you.

Find your new dream home in Canada.