Whether you are a Chinese or American buyer, as long as you want to buy a property in Canada, especially in the two major cities of Toronto or Vancouver, you have to pay various property taxes.
Who are the overseas buyers?
First of all, let's understand who is an overseas buyer? You can simply understand it as a non-Canadian, non-citizen, or non-permanent resident. Some friends may ask, I am a Canadian citizen, or I have permanent resident status, but I work and live in China all year round. If I want to buy a house in Canada, am I considered an overseas buyer? There is a difference here. If you are a Canadian citizen, you are 100% sure that you are not an overseas buyer, no matter how long you have been away from Canada; but if you originally had permanent resident status, because you returned to your country for development, your maple leaf card is invalid, then you are an overseas buyer.
What taxes do overseas buyers need to pay?
Next, let’s talk specifically about what taxes you need to pay when buying a house in Canada as an overseas buyer?
The first one is the foreign buyers tax. This tax has not always been there, but has only been levied since April 23, 2017. Canada's excellent natural environment and high welfare life have attracted more and more foreigners to buy properties here, especially in Vancouver and Toronto. In order to make the real estate markets in these two places more rational, the foreign buyers tax was born in these two places. In Toronto, the foreign buyers tax is 15% of the house transaction price, while Vancouver's foreign buyers tax has recently increased to about 20%.
The second is the HST sales tax. This tax has nothing to do with whether you are a foreign buyer or not, it only has to do with whether the house is new or used. In other words, whether you are a Canadian, an international student, or have never been to Canada, as long as you buy a new house, a pre-sale property, or a new house that has been demolished and rebuilt, you need to pay the HST sales tax. On the contrary, if you buy a used house, you do not need to pay this tax.
The third one is the land transfer tax. This is a little bit complicated. If you are a Canadian citizen or have permanent residency, and this is your first property purchased worldwide, whether it is a new or second-hand house, then this tax has nothing to do with you; and if you do not have any Canadian identity, then you must pay this land transfer tax anyway. As for how much land transfer tax to pay, different locations have different prices. For example, school district housing, financial centers, city centers, these so-called "good locations", the price is definitely high, of course, the house appreciation space is also greater.
It sounds like you've spent a lot more money, but don't worry, it doesn't mean that once you pay taxes, the money is gone. Canada's perfect tax system can be said to be very humane. As long as you meet certain conditions, the money can be refunded to you. We will reveal the details of how to refund these three taxes in other videos.