Non Resident Purchasers
It is very common for people from various parts of the world to purchase real estate in Whistler. The following are a few things to be aware of as a non-resident purchaser.
Mortgages: A lender will allow a non-resident to finance a property with a mortgage however they will likely require a minimum 35% down payment. Depending on the lender, these documents must be couriered to the borrower to be executed in the presence of a notary public, or signed in the presence of the lender in Canada. Sufficient time must be allowed to execute the documents.
Withholding Tax on Rental Income: The Canada Revenue Agency requires non-resident owners to pay 25% of their gross property income to the CRA. This withholding is a prepayment of income taxes and normally will exceed the actual income tax liability. The CRA will keep the full amount of prepaid taxes unless the non-resident files the appropriate Canadian income tax return by the due date. You may obtain an exemption by filling out a form called an NR6 explaining that the projected rental income is less than the anticipated expenses associated with the property.
Canadian Bank Account:It is advised that non-resident purchasers open a Canadian bank account to handle transactions associated with their Canadian property. Exchange rates fluctuate from institution to institution and from day to day so is important to research this before transferring any funds needed prior to completion.
Completing the Transaction: It is critical to complete transactions on the designated completion date in British Columbia. The vendor has the option of cancelling the contract of Purchase and Sale should the funds not be paid on the completion date and would be entitled to retain the deposit. It would not be uncommon for vendors who wish to continue with the transaction to demand interest or additional charges for extensions for late completion.
Accountant: It is advised that you hire an accountant familiar with non-resident taxation in Canada to advise you on appropriate ownership structure, HST issues, and to file your Canadian tax return.