Canadian Buy a House in USA

Can a Canadian Buy a House in USA?

TL;DR – Yes, Canadians can easily finance up to 75% of their property purchase in the US with a loan from one of the many financial institutions affiliated with America Mortgages.

The Pros & Cons of a Canadian Buying Property in the US

U.S. property ownership has many advantages, including potentially favorable exchange rates offered by conducting foreign investment in the US as well as the fact that foreign buyers receive favorable capital gains tax rates when purchasing real estate. Moreover, there are little to no disadvantages to foreign ownership and international buyers face the same and sometimes fewer property restrictions than domestic buyers.

Reasons Canadians Buy Property in the US

According to the National Association of Realtors, Canadians are the largest purchasers of US real estate. There are a multitude of reasons why Canadians choose to buy a property in the United States. Proximity, similar culture and language, and relatively open borders are all terrific reasons for Canadians to invest in property in the United States. But when it comes to individual reasons, most Canadians invest for one or more of the following five reasons:

Canadians buy US property as an investment.

Low housing costs compared to the Canadian property market (see below), landlord-friendly regulations, and high rent-to-loan value can all combine to make US property a very attractive investment. Foreign investors often receive favorable US tax rates compared to Canadian taxes, particularly when it comes to capital gains tax — depending on your unique situation. Mortgage costs can be lower, and with the US-Canada free trade agreement (FTA), it’s much easier to move your money in and out of the country. 

Canadians buy a house in the USA to own a second home / vacation home.

Snowbirds fly south for the winter, and for many, those stays can end up being extended and make it cheaper to own a home for the winter. You also get all the comforts of going to your own home after heading south. And with any luck, when you’re not staying in that vacation property, you can take advantage of the next reason Canadians are the biggest purchasers of homes in the US, thus allowing you to combine reasons 1 & 2. 

Canadians buy a home in the USA so they can move to the US.

Many foreign nationals want to live in the United States for a variety of work and family-related reasons, while many snowbirds aspire to retire there. Whether immediately moving into the home or planning to move there at some future date, if you own property, it makes any transition to the United States much smoother and less complicated.

Canadian Buying Property in USA 2022 – The Ultimate Guide

Are houses cheaper in Canada or the USA?

Residential real estate in Canada is on the rise. In a lot of ways, Canada is growing faster than the United States. Some of the reasons include more available land, new jobs, and a higher percentage of immigration. Canadian housing debt levels have also reached record levels. 

Pre-pandemic average house prices in 2017 were 19.7% higher in Canada than in the United States, but housing prices are higher in some parts of the US. For example, average home prices in Washington D.C. are 19.4% higher than in Toronto.

There’s also the expense of just owning a home. Canada has the highest taxes on homes in the world. So while Americans pay an average of $9,800 for taxes on their mortgage, Canadians pay an average of $35,400.

So, are houses cheaper in Canada or the United States?

Homes in the United States cost less on average than homes in Canada, but some popular destinations in the U.S. can be more expensive than Canada.

This is one of the biggest reasons we are so frequently asked at American Mortgages, “Can a Canadian buy a house in USA?”

Can I buy a house in America if I live in Canada?

Canadians can buy property in any of the 50 United States with a real estate loan from one of our many reputable lenders. Cross-border transactions are our expertise, particularly when it comes to U. S. property and home purchases. All it takes is 30% or more of the purchase price of the house and you are eligible for our 97% success rate mortgage loan program.

As a mortgage broker working with hundreds of financial institutions, we are able to get you the absolutely best terms whether for a residential property or a commercial property. We are able to secure the lowest mortgage payments possible thanks to our due diligence, vast connections with real estate agents, and thorough knowledge of local laws.

Can a Canadian live in the USA if they buy a house there?

Canadian residents can buy property in the United States, but U.S. Citizenship and Immigration Services (USCIS) does not hand out green cards or visas simply based on home purchases.

While buying a house in the U.S. does not directly affect your immigration process or allow you to gain a work visa, it certainly doesn’t hurt! USCIS wants to know that any immigrant will have a stable home and source of income, and if you already own a home and perhaps even have a second home that provides rental income, then it can only help you in your efforts to obtain a green card. 

There are literally dozens of methods to obtain US citizenship, but they all start with a “green card”. It’s a good idea to make sure that you’re aware of all legal requirements for citizenship in the United States. The USCIS website provides a lot of useful information, including specific guidelines for green card applicants.

Can you get a mortgage in the US as a Canadian? How to finance US property.

If you are a Canadian who has been looking at US property as an investment and trying to figure out how to finance it, then know that Canadians are eligible for loans from America Mortgages. Check out our mortgage lending process for more information.

We have two types of loans: stated income mortgages and full income mortgages. The typical requirements for a full income mortgage are relatively simple: 

Meanwhile, stated income mortgages are for business owners and others who may not check all the boxes that most banks like to check off — like having a steady paycheck from a large corporation. At America Mortgages, we represent plenty of lenders who are happy to provide a loan, even when banks make it a challenge.  

Tax Compliance for Canadians Who Own US Property

These are tips for people who will be renting out their property, but be sure to directly consult with an expert tax professional before making any purchases of commercial or residential properties. Those pros will give you much more detailed information regarding your specific situation.

Before you buy a home in the USA, you’ll have to register with the Internal Revenue Service (IRS) and apply for a US Tax ID number if you don’t already have one.

Then you’ll need to file an IRS Tax Form W-8ECI to declare that your income is effectively connected with the conduct of a trade or business in the United States. You also need to provide this form to the person who is paying rent.

The IRS themselves have kindly provided detailed coaching on filing your real estate rental income properly. Since every situation is unique, read up and consult with tax experts to make sure that you have the best plan in place for your specific situation.

Tips for Canadians Purchasing a Rental Property in the US:

There are myriad rules, regulations, and fees involved that could make home ownership seem like a challenge and navigating these legalities can be intimidating. They can all be overcome, and overcoming them can end up being extremely profitable.

Have a Plan and Stick to it

First things first. Before you start looking at properties, sit down and do your research. Figure out how much you can afford to pay, what size home you want, what part of town you want to live in, and what area you want to target. By deciding these things first, you will save yourself a lot of time, money, and potential headaches.

Know the Location and Lifestyle

It’s crucial that you have knowledge of the area of your rental property. The truth is that no one understands the unique lifestyle in Canada like we do, so choosing a place that’s best-suited for your potential tenants is key. You also need to make sure that your property is in a safe area, as this may affect what sort of tenants you select.

Find a Property Manager You Trust

Get to know your property manager and what they’re capable of. You want to choose someone who is communicative, responsible and capable. You’ll also want to make sure that whoever you choose is able to charge a reasonable fee and that his fees are entirely transparent. See what others have to say about your potential property manager. Check out online reviews, news articles, employer websites, and anywhere else you can find information.

Check the Leasing Process. 

If your potential property manager is inexperienced or disorganized, this may affect how quickly they can lease the property. You want to make sure that whoever you are renting from knows how to properly market their property

Understand the Costs

Be sure to check into local property taxes before making any purchase. You will be stuck with these taxes for the life of your ownership, so be aware of them before you jump into any real estate transactions.

Can a Canadian buy a house in USA?

Have a look at some of these amazing success stories from our terrific blog, the Learning Lab, before making your final decision.

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