Tips for Non Residents or Foreigners Buying Property in Nova Scotia and Canada

Canada is a land of diversity. Diversity not only in the land itself, but in cultures, economy and lifestyle.

Canada offers something for everyone. Rural settings, oceanfront, cosmopolitan cities, cottage country, mountain ranges- you name it, Canada has some place to suit your idea of home.

Nova Scotia in particular is surrounded mostly by water so there is a large geological range of types of oceanfront. White sandy beaches to bath on, fossil laden sediment banks to explore, dramatic rock face to watch crashing waves, and lots of calm inlets to explore by kayak.

As someone thinking about buying in Nova Scotia, falling in love with the province is just the start of making this dream a reality and making it a reality is not as hard as one might think if you follow these few pointers.

Housing price vary greatly, depending on location, or more so the proximity to Halifax; Nova Scotia’s capital. Homes within half hour of the city can start at approximately $230,000 for a single family home. Up to over 2 million dollars for estates located on the Halifax Arm. From the half hour to hour commute to Halifax you can expect an average of $175, 000. With pockets of higher priced properties located in desirable towns such as Chester and Wolfville. Beyond the one hour driving distance to Halifax prices gradually decrease, with the cheaper real estate prices to be found in southern and northern Nova scotia, such as Digby, Yarmouth and Cape Breton. Again, there will be pockets of higher priced properties that have direct ocean front or lakefront or farming capabilities.

So depending on what type of property you are looking for may determine whether or not you would be paying all cash for a property or rather would need to obtain financing through a lender. Obviously, paying cash would be a lot simpler process.

If you need financing, then the first thing you should do is to contact a Canadian mortgage broker or bank. You will also have to have a Canadian bank account as well, through which the mortgage funds can be allocated if approved.

Most of the documentation required to get approved for a Canadian mortgage is the same for Non- residents and foreigners as it is for Canadian citizens. For Non- residents, the lenders will need proof of income/employment, usually for the past 2 years full time. Business income or seasonal income will require a longer history report. At least 6 months worth of banks statements and international credit check.

The lender will most likely want an appraisal done of the property that you are interested in buying. Also, a copy of the property’s taxes, condo fees or Home owners association fees would have to included your mortgage application.

A reference letter from your home bank is required. Possible also required may be verification of no taxes owed and proof of assets in home country. Last, but not necessarily least, you will need to provide proof of deposit, to have been in an account for 90 days.

If you are a US citizen then the downpayment amount required is around 20% of the purchase price and a non resident from anywhere else would require 35% down payment on properties valued up to 2 million dollars.

If you are considering buying an income property as a non resident, keep in mind that you will be required to set aside 25% of the income for paying any government taxes that may be incurred once you go to sell.

Also if you are buying in Ontario there will be a 15% Non- Resident Speculation Tax applicable to the purchase price.
In Nova Scotia, there will be a one time deed transfer tax on the purchase price. Payable on closing to the property’s municipality. This taxes range from 1-1.5% depending on the Municipality as each Municipality sets their own tax rate. This in not the property taxes. It helps the Municipalities track and set the assessment amounts for properties as they sell.

Once you have mortgage pre- approval in place, you can start looking for properties. The final mortgage approval will not be given until the lender receives an accepted offer of purchase and can determine if the property you want to buy is worth their risk. Many lenders will only provide an extra 10% on the mortgage to make improvements or renos.

Searching for properties in todays age of the internet you can find all the active listings on the Multiple Listing Service which can be found on Realtor.ca. Most REALTOR®s have their websites linked into Realtor.ca so all the MLS listings can be viewed on the agents and brokerages websites, but for the most current and up to date information on Realtor.ca.

If you already are familiar with Nova Scotia and know which area you would like to focus your search, then you can start your search on Realtor.ca using the community search option.
If you are open to or need guidance on which community may be best for you, you could reach out to local groups such as professional associations on linkedIN, MEET UP or search interest groups in Nova Scotia and reach out for referrals; referrals for communities or for a REALTOR® to work with.

Once you connect with a REALTOR®, they will work with you to get to know your likes and dislikes. They will ask you what you like to do for recreation, entertainment, what you want to use your property for. They need to know this information in order to find the best home and community for you.