01:46
Kyle Mazzuchin
Hello everybody. Thank you very much for joining us. We’re just waiting for a few more people to come on the line, and then we’ll start in a few seconds. Hello everybody. My name is Kyle Mazuchin, vice president for the domestic markets here for American mortgages. Hopefully, you’re doing well this wonderful Thursday evening and Friday, wherever you are around the world—joining us. Today, we’re here to talk about some Canadian tax overhaul and strategic moves for our investments. So, here is just a little bit of content for today. We’re here to review a little bit from the last webinar we did in February and a little bit about myself, the presenter, being here with American Mortgages since August 2023. It’s been a wonderful ride thus far. And then why the US versus Canada?
03:46
Kyle Mazzuchin
There are lots of domestic trends that have really turned the tide in terms of Canadians investing in American real estate. Also, some underlying statistics as to immigration trends are included in that piece. So, we want to make sure that there are some pieces of data that support why there are going to be strategic investments from Canadians investing in the US. And then probably one of the biggest pieces of the 2024 tax here in Canada has been the Canadian tax changes. The Canadian gains inclusion has gone up. Which state is good for me, and what should I do with your capital? So why American mortgages? 100% of our clients are working abroad. So, we want to make sure that there is relative ease in having American-based access from anywhere around the world, including Canada.
04:54
Kyle Mazzuchin
Naturally, being close to the border, we only focus on foreign nationals and us expats. We have representation in twelve different countries. Make sure that whatever language that you speak, we have that availability for you. Speaking of languages, we have several different kinds of languages, and we also understand cultural nuances. And then also we have all loans don’t have a requirement for us credit, which is fantastic. Also, we can have closing documents signed without traveling to the US. Common sense underwriting, which is probably one of our main focuses here at American Mortgage, makes sure that the process is very easy and simple to understand. There’s no age limit or restrictions on getting any sort of US-based investments and then interest-only servicing facilities.
05:47
Kyle Mazzuchin
So, in order to keep your rental yield high longer, the sanitization schedule that we can have is 40 years, then loans in all 50 states. So, you have 50 different options in whatever state you want to invest in. We have transparent fees and processing and then also 24/7 access to myself or any of my colleagues around the world. So if you want to have a 04:00 a.m. or if you want to speak mortgage to somebody, go to our website, www.americanmortgage.com. A little bit about myself. Been in financial services for approximately, probably just a little bit over ten years, in different capacities, specializing in mortgage origination, providing solutions for all different types of customers and investors, whether it’s in Canada or the United States.
06:36
Kyle Mazzuchin
My previous leadership experience was as a senior leader at the Bank of Montreal, managing a team of 25 based on beautiful Vancouver Island with my family, two children, and a wonderful spouse. So why invest in Canada versus the United States? So larger, bigger, better, a more diversified economy, global influence, and innovation. Obviously, when we’re talking about any sort of R and D, we really look to the United States for being a leader in that area. Lower taxes and also favorable tax treaty, stronger currency. Obviously, a lot of different countries hold it as a reserve currency, and it has the reserve currency status in many different countries around the world. Probably one of the most interesting topics here in Canada in the year 2024 was the capital gains inclusion tax change. So now it’s in the 2024 federal budget.
07:36
Kyle Mazzuchin
There have been lots of changes to the proposed capital gains inclusion rate for individuals, trusts, and corporations. So, as of June 20 25th, 2024, not that long ago, anyone making about $250,000 and above on a sale of an asset has their inclusion tax change from 50% to 66.7%. There are obviously a couple of delays, but it will still definitely impact some investors looking to make a profit on any sort of asset or real estate in this case. So, just some examples. So if we look at someone making $75,000 and they profit from the sale of a cottage, for example, 100 grand, after paying real estate fees and clothing costs, 50% of that profit is going to be taxable, about 50 grand added to your income. So, if we look at this extrapolation. So you’re looking at about 125 grand in that case.
08:37
Kyle Mazzuchin
So, pertaining to this situation and understanding these implications can empower you to make informed financial decisions and effectively plan for your future. So, based on the budget that has passed, all corporations and trusts will increase the 66.67% up to 50%. So, it is quite a substantial increase for anyone making $250,000 or more. So, for individuals making over 250,000, the inclusion rate would be that percentage. And for individuals under 250,000, the inclusion rate will remain at 50%. So, how do we plan the future as Canadians? So, realizing the existing capital gains before June 25 is critical. Then, complete pending transactions before the deadline. Review capital assets held in trusts or corporations, and then stay the course with long-term unrealized assets, analyze the time and value of money for tax payment decisions and review your residency requirements to optimize your tax situation.
09:50
Kyle Mazzuchin
So, how do we compare to our brothers down south? So, Us citizens, for example, or green card holders in Canada, can face a total tax rate of approximately 39% of capital gains. So, Canadian, us, federal, or us net investment tax. So leaving Canada can become, you know, a bit of a challenge. So, becoming a non-resident in a non-income tax state could definitely provide you with better results. So, for example, as you can see here, taxes are only 24%, but when you leave Canada, it imposes a departure tax on individuals, ceasing residency of some sort and subjecting them to a certain capital gain amount. Another piece of information we can use is net investment income tax. So, us citizens and green card holders in Canada are subject to us tax.
10:41
Kyle Mazzuchin
The federal tax on capital gains and capital assets held for one year or longer has a maximum tax rate of 20%. Capital gains taxes can be claimed as a foreign tax credit to reduce or eliminate your federal income tax. So, in summary, capital gains tax impacts cross-border investment decisions. And it’s best to get the proper tax advice from a cross-border accountant so that you can optimize your Canadian and our tax situation. So, here is some data pertaining to immigration from Canada to the US. So, the federal government ultimately wants to increase the number of permanent residents. So, in the last probably two years, we’ve had a lot of immigration. So, in this case, there will be about half a million permanent residents by 2025.
11:42
Kyle Mazzuchin
Lots of different reasons why lots of mass retirements are built, and there is a job shortage in certain occupations that are really looking at the government of Canada, in this case, the liberal party, in order to bring in twice as many as they have done since 2015. So that’s going to be impacting a lot of new house builds in Canada. So essentially, an estimated three and a half million houses and units beyond what we project need to be built as usual. So essentially, that’s going to leave a big hole in terms of bringing half a million people and doubling our immigration in 2015. It really impacted the affordability of housing in Canada. So, with that comes a bit of reach from our tax system. In order to stop speculation in the Canadian housing market, a series of taxation pieces came aboard.
12:38
Kyle Mazzuchin
For example, the capital gains piece, the underused housing tax, and a myriad of different provincial regulations have come aboard, especially with Airbnb in provinces such as Quebec, Ontario, and British Columbia. So you can see immigration back to the trend after the pandemic, for example. So, as you can see here, between 2018 and 2023, the number of people for every quarter has essentially left Canada with upwards of half a million people per year coming in. So we’re seeing a lot of that level out, especially with affordability being difficult, especially in the real estate sector, and not keeping up with mass immigration, in addition to individuals leaving Canada for whatever reason. So, just some trends. So, in the first six months of 2023, 42,000 people have left Canada. This adds to about 93,318.
13:43
Kyle Mazzuchin
Sorry, 93,818 people have left between 2022 and exits in 2021. The immigration rate hit a two-decade high in 2019. So this really gives you an example of some statistics. This is not a new trend. It’s really been here since probably the year 2017, where we’ve seen a net loss of a lot of citizens leaving and then trying to recoup a lot of that through immigration, through the permanent residency program, since probably after the pandemic has ended. So now to some probably better news. You want to look at different jurisdictions in order to make a purchase. So, a couple of different places that Canadians are looking at is Florida. As you can see, there’s a big Quebecois community in Florida as well as everywhere around the world. Florida is very desirable for its diverse housing options.
14:43
Kyle Mazzuchin
Arizona is quite dry and mild, especially for those Alberta-based individuals who are looking at Sedona Monument Valley to lower their costs in the state of Arizona. California is definitely one of those, as well. It’s a diverse lifestyle with access to the ocean, mountains, and forests. California probably has the 8th largest economy in the world. So there’s a very diversified economy, probably just as big as other countries combined. Probably one thing that we’ve never thought of is really Louisiana, so it’s for its southern culture. French influence. So again, another French Canada influence. The lower cost of living and favorable property tax system has left its appeal with Canadians looking to Louisiana as an option. Montana is close to British Columbia and Alberta. So, there are lots of nature enthusiasts who enjoy abundant outdoor activities, such as skiing, fishing, and hunting. So, it is definitely an outdoor escape for a lot of individuals.
15:48
Kyle Mazzuchin
South Carolina has lots of good golfing beaches as well. Near, near Georgia, so wonderful in terms of its rich history and showcasing museums and plantations. So, where do Canadians go? So, as you can see, it’s California, Florida, New York, or Texas. Critical in terms of identifying which spot you want to be in such specific counties in these certain states. Los Angeles County is very natural. Orange County, Maricopa County in Arizona. King County is in Washington, especially near British Columbia and then Broward County. So, combined, these five counties are home to approximately 13% of all immigrants currently living in the United States. So which cities are most popular for tourists? So if you’re just looking for vacation means, Orlando, Las Vegas is a wonderful place to go for a weekend getaway. You’re looking for a nice winter getaway from Toronto in the minus ten degrees Celsius.
16:58
Kyle Mazzuchin
Miami, Los Angeles, San Fran, and are you looking for a New Year’s getaway? Definitely New York. Now, one of our biggest passions is our mortgage overview here at American Mortgage. So, here is just a little bit of a review of our programs. No us credit is required, and there is no need for assets under administration. Foreign income is allowed through an income letter loan program in all 50 states, up to 75% loan to value foreign national booking for purchases, and then if you are living in Canada and want to purchase back in the US, So 80% LTV or loan to value for ex pets loan approvals are in 72 hours. Contact us. We’ll have a letter ready for you. If you’re looking for a pre-approval or conditional approval based on a refinance application, we can definitely close in 30 to 45 days.
18:00
Kyle Mazzuchin
Probably one of the biggest pieces. Can you sign closing documents in major countries? So we’ll get into that a little bit later in terms of what that process will look like. So we can definitely look at purchasing properties, refinance, and if you’re looking for an equity release, 30-year amortization regardless of age, ten-year interest only to keep your rental yields high. Loan programs without income are available, and 97% of all of our loan applications that are submitted are approved. So, some of our programs are just a highlight there. So, the AM rental coverage program, which is closed for 30 to 45 days, as we alluded to, does not require US credit or residency. So, we qualify only on the property’s projected rental income.
18:54
Kyle Mazzuchin
So again, if we look at the example below, $2,400 $2,400 in expenses, you qualify for the AM student program, so student tenants are not required to have income, but we can definitely get you approved to help your child’s credit and available between $150 to $3 million AM investors. So, we can use 30 to 45 days for income, but tax returns are not required. So, we qualify using an income letter from an employer or accountant. Loan amounts from $150 to $3 million are available, and again, a 30-year fixed interest-only program is available and up to 75% financing foreign nationals. So, if we look at a debt-to-income ratio, 43% of that.
19:52
Kyle Mazzuchin
So if we look at a gross income of ten grand, and if we look at your mortgage payment, taxes, and insurance at $4,300, we definitely can look at that ratio of 43%, which is fantastic, so if you’re a us citizen living in Canada and wanting to purchase in the States. Again, the same DTI, or debt-to-income ratio at 43%, requires two years of tax returns, and a 680 FICO score is definitely required. And we qualify the same as if you are living and working in the US. Loan amounts differ a little bit between three to 5 million. So, our high net worth program. So, no personal income is needed, and no assets under administration are required. So essentially, that financial institution doesn’t need the $5 million portfolio in order to exist on their balance sheet.
20:48
Kyle Mazzuchin
So you can just confirm it; we’ll just need to confirm a two-month average liquidity of your portfolio in order to qualify. So, the methodology below. So, if we look at 5 million divided by the 60-month fixed term, you’ll be able to have that mortgage payment at 80,000 and the income generated at $83,333. So, a little bit of our contact information is here. As you can see, our headquarters are in the US and Singapore, and our global mortgage group’s office is there. So, everybody, thank you very much for taking part in our presentation. So we’ll just go to a question and answer period. So, it looks like we have a couple of questions that have popped up. So, can I register a property in a Canadian company or an American LLC?
21:54
Kyle Mazzuchin
So, you want to make sure that you’re looking at registering an American LLC. You can go to our website @americanmortgages.com, and on the concierge tab, you’ll be able to get directions to register a limited liability company. So essentially, that removes any sort of liability you held personally. So, if you register a company name onto a property in the United States, you’ll be able to remove any sort of personal liability. Also, please go to a tax accountant in order to make sure that you receive net benefits within your home country in terms of taxation. So, I have a second question: What’s the best way to get my application started? So, at the end of this presentation, we could definitely look at sending out some details in order to start your application.
22:56
Kyle Mazzuchin
So we do have a wonderful new dashboard that we’ve launched in the last six weeks where you can start your application from the comfort of your own home rather than sending emails so you can log in to apply dot americanmortgages.com Kyle Mazuchin Register you’ll be able to make your application and send your documents directly to our online portal and have immediate updates. So how easy, another question here. So, how easy is it to transfer cash into us dollars? So we’ve teamed up with our concierge tab; you can definitely go to one of our partnerships, and vendors will be able to transfer cash with relative ease and transfer it from Canadian to American dollars. So, we’ll definitely have some information on our website and our concierge tab.
23:50
Kyle Mazzuchin
So, I think we might have answered this other question here in terms of how to register an LLC. So you can register through our website [email protected]. Use the concierge tab to look at getting your LLC started. It’s very inexpensive. In order to do that under dollar 150 US, you’ll be able to do that. So, can I complete my us purchase without leaving Canada? Great question. Very common. So if you have a, if you have the ability to go to your local notary and if they have something called an apostille stamp, essentially it’s a service where a lawyer is able to witness other documents from other countries, and it’s legal there.
24:50
Kyle Mazzuchin
So you can have your lawyer or not be able to use that stamp from Canada, and then you send the documents back over courier, and you’ll be able to get your mortgage funded without the need to go to the US. Another way is to go to the local US embassy to make an appointment. One drawback is that it could take a couple of months for you to get an appointment. So you may want to look at both options. Okay, so I’m a Canadian looking to buy a vacation home in the United States. And what are the rates? So your rates will be different from having an established credit score in the United States or not so normal for your down payment. You’ll be looking for at least a 25% down payment based on our income letter program.
25:48
Kyle Mazzuchin
Interest rates will probably range between the high sevens to about mid-eights, just dependent on state and location. So, can I get an insurance quote through American Mortgages? Yes, you can. Mauri alluded to that. So please go to our [email protected] on our concierge tab in order to get an insurance quote through our website. So, another question. I’m purchasing a foreclosed property. Can I get financing? So, great question. So, most of the time, there needs to be a bit of a cash-purchasing situation.
26:33
Kyle Mazzuchin
So you’ll need to go through a bit of an auction process, so they may allow it, but in order to have a more competitive situation, I would recommend that you have cash in place, purchase it, and then maybe do a refinance at a later date, because you may want to look at the condition of the property, get your inspections done, and then have an improved property. And if you’re looking at improving the property as well, we do have products that we can look at as an option for you to rehabilitate the property. So what’s the maximum loan-to-value for investors, and is it income-dependent? So, the maximum loan to value for purchasing is a 75% loan to value.
27:23
Kyle Mazzuchin
It can differ depending on a couple of items, such as if you want to qualify with your income in Canada with the income letter, we can definitely do that, or we do definitely have some other options for you based on debt servicing or DSCR or projected rental income, but that could come in at a slightly lower loan to value. So, definitely, there is a recording that will be sent out over the next little while. So, it will probably be out in the next ten to 14 days, posted on YouTube and all of our socials. So, which of the states you highlighted are the most popular for Canadians to own? So, it definitely happens in two different ways. So investors are looking at Ohio, Illinois, and probably southern Ontario. A lot of individuals who live down there look at the adjacent states.
28:27
Kyle Mazzuchin
So New York, Michigan, Ohio, Illinois, kind of in a bit of the belt of North America, near the Great Lakes. So, a lot of individuals in that area of the world are looking at those particular states for retirees and secondary homes. You can definitely know that retirees are looking at warmer states. So, Florida is definitely a big option for lots of different communities down there, such as a very big Quebecois community in Florida. Lots of Canadians that are down there are also realtors. So, if you’re looking at purchasing in Florida, we do have some Canadian contacts available to you in those states. Some other popular options from western Canada. So, in Alberta, lots of individuals like to make purchases in Texas. We do have some relationships with some developers in Texas.
29:22
Kyle Mazzuchin
So, if you’re looking at a brand new home, for example, pay attention to our newsletters that go out probably every other day pertaining to real estate topics or themes and trends within different states. Another option is Arizona. Arizona is a wonderful option for Western Canadians looking to purchase a property. And also Nevada. Nevada is definitely popular with Airbnb and transient zone properties, including Florida and California. So, we have another individual here, the 1031 exchange, so you can delay capital gains taxes in us by using it for a similar or more expensive property. So, you want to make sure that whatever you sell is of the same value or higher in order to take advantage of the 1031 exchange.
30:20
Kyle Mazzuchin
If you’re looking at those different options, I highly recommend that you go to a tax professional or a cross-border accountant if you need any sort of options for cross-border. I do have individuals available, and you can also go to our [email protected] in the concierge section. You can have somebody reach out to you from our tax consultancy partner. Are there age restrictions for retirees applying for mortgages? So again, none whatsoever. Fantastic. Very little in terms of risk for anyone who feels that they want to diversify their assets without the need of having any sort of age restrictions. So our other question is, how long would it take for investors with American mortgages to get mortgage approval? So, again, 72 hours is our golden rule.
31:17
Kyle Mazzuchin
We want to make sure that there’s a little bit of time to look at different. If you have a specific corporate setup, we want to make sure that we’re doing our due diligence and asking our lenders. So, for the more complex situation that you may have, we want to make sure that we’re asking the right questions. But for very straightforward applications, 72 hours is our golden rule in getting back to you with conditional approval. So, another question. So, look, got a bit of a three-packer here. So, question one: Is an LLC subject to double tax? So, again, highly recommend that you go to a a tax professional within the country that you’re in. Or go to our [email protected], on the concierge section. Or if you would like somebody from the Canadian side who’s dual licensed, please let me know.
32:09
Kyle Mazzuchin
However, there are tax structures specifically for Canadians. I would just recommend that if your financial picture allows it, you speak to somebody on that side. Is a remote online notary not available, and do other companies offer that? Again, I just think that in order to keep the process standardized and straightforward, different states do different things. So, in order to keep compliant with a lot of complex situations per state, I’d recommend using the apostille stat method with any sort of Canadian notary or lawyer. Okay. Then, there are three HeLOCs available for liquidity as a foreign national. And if you don’t have tax residency, the product is not available. So, just to reinforce that, here are some other questions. So, are interest rates better if you qualify with an income letter instead of a DSCR?
33:12
Kyle Mazzuchin
Again, this is probably from a lender to a lender piece. So, different lenders will have different specials. Definitely, when it comes to having established credit in the United States, you will definitely look at getting a slightly better option. Also, increasing your down payment. So, with that kind of 40% mark, you’ll definitely get a break in your interest rates. So, another question here. If I have a property generating a cash flow of $2,500, how much loan can I get? So it’s a little bit more complex than that. So I would recommend, again, speaking to one of our loan officers, including myself. So, I have my calendar link in the chat. So please go there, click on it, and then see what my availability is.
34:03
Kyle Mazzuchin
And maybe we can chat in order to see how much of that $2,500 we can help you get a loan against a property. So, is an American mortgage broker or a lender? So, American mortgages essentially help with getting financing in that situation. So we definitely can provide you with a myriad of different options in order to make sure that we’re able to place the right loan in the situation that you may have. Okay, so we’re about 535. So again, if you’re looking at any sort of situation when it comes to getting pre-approved for future purchases, please contact us. My Calendly link or contact information will be in our chat and in future correspondence with everyone who has been on this particular webinar.
35:15
Kyle Mazzuchin
A little bit more of an update, just with the most recent changes to the capital gains inclusion tax. So again, we just want to make sure that everyone in Canada has an option when they’re purchasing properties in the United States, whether it be a secondary property or a revenue property in all jurisdictions across the United States. So, as you can see there, just click on the link in the chat. Highly recommend that you book with us in order to explore a lot of our loan programs in all different states. If you have any questions, we are readily available 24/7/365 days a week. If you want to talk on Christmas Day, some people are available, but we have to wait till Santa leaves the particular area in order to be available. So. So again, everybody, that’s our presentation for today.
36:20
Kyle Mazzuchin
If you have any further questions, please ask them in our chat. You can also contact us at any time at Kyle dot mizuchinmericanmortgages.com. Like, follow, and subscribe to all of our socials. We definitely do a lot of different social media posts every other day with our wonderful co-founders, Robert Chadwick and Donald Clip, who have wonderful posts, and with Global Mortgage Group and American mortgages. So that’s it for us for today. Thank you very much, and have a wonderful day.
Disclaimer: This transcript is AI-generated, so kindly pardon any transcription or grammatical errors that may be present.
