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Investing from abroad

EricBodin

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Hi,

I have been a REIN member since february and currently own 1 rental in Vancouver. I might be moving back to France for a few years as I am french and I have been in Canada for over 4 years. I would love to keep investing in real estate in Canada while in France but as I am not gonna be a Canadian resident anymore (I have the Canadian citizenship and my wife is a born Canadian) I am wondering if banks will approve me for mortgages ? as the only asset I will have in Canada will be this one rental.
I appreciate your help and I believe it is possible to do as a few of you live and invest from abroad!!!

Eric
 

Nicola

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QUOTE (eb06000 @ Nov 6 2008, 05:33 PM) Hi,

I have been a REIN member since february and currently own 1 rental in Vancouver. I might be moving back to France for a few years as I am french and I have been in Canada for over 4 years. I would love to keep investing in real estate in Canada while in France but as I am not gonna be a Canadian resident anymore (I have the Canadian citizenship and my wife is a born Canadian) I am wondering if banks will approve me for mortgages ? as the only asset I will have in Canada will be this one rental.
I appreciate your help and I believe it is possible to do as a few of you live and invest from abroad!!!

Eric

Hi Eric,
My husband and I have bought 10 properties from abroad, so it is definitely possible. You also have more hoops to jump through, though. For example, getting a mortgage is a little tougher, seems to take longer and they usually want 35% down. You may end up without enough information on your credit report to have a score, in which case some lenders (e.g. Firstline) won`t even look at you. Also, it`s harder to get insurance.

Once you are living overseas, you will also need to pay withholding tax every month on your rental income.

Anyway, it`s definitely doable - good luck!

Nicola
 

ChrisDavies

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And for the current rental it makes the tax situation a little more complicated, but not much more. We`ve managed properties before for many expat owners.
 

Thomas Beyer

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QUOTE (eb06000 @ Nov 6 2008, 01:33 AM) Hi,

I have been a REIN member since february and currently own 1 rental in Vancouver. I might be moving back to France for a few years as I am french and I have been in Canada for over 4 years. I would love to keep investing in real estate in Canada while in France but as I am not gonna be a Canadian resident anymore (I have the Canadian citizenship and my wife is a born Canadian) I am wondering if banks will approve me for mortgages ? as the only asset I will have in Canada will be this one rental.
I appreciate your help and I believe it is possible to do as a few of you live and invest from abroad!!!

Eric
There are withholding tax issues on gross rent (as opposed to net income) and you will have to put more money down as a non-Canadian.

You may wish to consider setting up a Canadian corporation, with a Canadian director (your wife, or a friend perhaps) and you as the main shareholder !
 

Nicola

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QUOTE (thomasbeyer2000 @ Nov 8 2008, 01:37 AM) There are withholding tax issues on gross rent (as opposed to net income) and you will have to put more money down as a non-Canadian.

You may wish to consider setting up a Canadian corporation, with a Canadian director (your wife, or a friend perhaps) and you as the main shareholder !

You can withhold tax on net income rather than gross if you file an NR6 form with the CRA. You need someone in Canada (e.g. your property manager) to undertake to pay the taxes every month. The withholding tax rate is 25%.

Regarding the Canadian corporation, my understanding is that the extra hassle of incorporating and more complicated tax filings don`t make it worth it, and there are no tax advantages as it`s not a Canadian-controlled private corporation (CCPC).
 

MonteDobson

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Oct 7, 2007
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Another strategy would be to JV with a like minded local investor. Then you could be as involved as you want to be while having some local connection to be your eyes and ears.
 

JasGrewal

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Oct 16, 2007
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QUOTE (eb06000 @ Nov 6 2008, 03:33 AM) Hi,

I have been a REIN member since february and currently own 1 rental in Vancouver. I might be moving back to France for a few years as I am french and I have been in Canada for over 4 years. I would love to keep investing in real estate in Canada while in France but as I am not gonna be a Canadian resident anymore (I have the Canadian citizenship and my wife is a born Canadian) I am wondering if banks will approve me for mortgages ? as the only asset I will have in Canada will be this one rental.
I appreciate your help and I believe it is possible to do as a few of you live and invest from abroad!!!

Eric


Hi Eric:

We have worked with numerous non-resident Real Estate investors who have purchased with and without Canadian JV partners. The lending criteria is becoming increasing more conservative due to the current credit climate, however, there are options available for financing.

I recommend that even if you are relocating abroad that you keep as much of your Canadian credit as possible as this will help with qualification. Consult with a tax specialist in France to ensure there are no tax implications with maintaining any ties with the previous country of residence as well.

Cheers,
Jas
 

Nicola

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QUOTE (Jas @ Nov 14 2008, 01:51 AM) I recommend that even if you are relocating abroad that you keep as much of your Canadian credit as possible as this will help with qualification. Consult with a tax specialist in France to ensure there are no tax implications with maintaining any ties with the previous country of residence as well.

You need to be careful about maintaining too many ties to Canada if you want to be considered a non-resident.
 
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