Planning your Finances before you move
We talk you through the financial matters involved in purchasing property in Canada.
There are a number of financial matters involved in emigrating to another country. This is why, before you fully begin your journey, you need to sit down and establish if it is a financially viable decision, and if so, how you will fund your purchase. The following are the major financial considerations you’ll need to tackle prior to buying in Canada:
If you are a current homeowner, you know how many costs are associated with purchasing property that go above and beyond the price tag of the property.
How will you finance your move?
Before you can crack on with all of the steps involved in moving to Canada, you need to establish how you will fund the purchase of your Canadian property. Perhaps you’re funding the purchase from savings, or an inheritance? Or perhaps you will need to rely on securing a mortgage? If this is true, it’s important to have a mortgage approved before you begin your property search. It shouldn’t be a problem to secure a mortgage with a Canadian bank as long as you can pass a credit check, provide proof of income, and supply the required deposit. If you’ve only just arrived in Canada, you may have to pay a higher deposit amount of up to 35 percent. Once you’ve supplied the required documentation, you should know within 48 hours whether you’ve been approved. Do bear in mind that you can’t obtain a mortgage for a Canadian property from any bank that’s outside of Canada.
To speak to a mortgage adviser about what works for your individual circumstances, contact the Resource Centre on 020 7898 0549.
When buying property in Canada, there are a number of taxes you will need to budget for. For example, if you are going to rent out the property, you will need to pay income tax on that rental income, even if you aren’t a permanent resident in Canada. You also need to budget for transfer tax, which is based on the value of the property, and usually amounts to around 1 percent on the first $200,000 (approx. £115,150) and 2 percent on anything above that amount. You might be able to dodge this tax depending on your individual circumstances, i.e. if you are a permanent resident, and don’t own property anywhere else in the world. Contact your provincial government directly to establish your liabilities.
As each individual’s circumstances differ depending on assets and income, we recommend consulting a tax specialist to ensure your affairs are in order.
You will also need to alert the Inland Revenue to your change of circumstances, which will ensure your liabilities are up-to-date. As each individual’s circumstances differ depending on assets and income, we recommend consulting a tax specialist to ensure your affairs are in order.
When making such a significant purchase in a different country, you need to consider how inheritance tax might affect you. You must also take out a will in Canada to ensure the best interests of your loved ones are protected.
Avoiding hidden costs
If you are a current homeowner, you know how many costs are associated with purchasing property that go above and beyond the price tag of the property. You need to factor in legal fees, buying costs, maintenance costs, and any budget for renovation. If you’re moving to Canada too, you will also need to budget for the relocation. For a thorough breakdown of all of the ‘hidden’ costs associated with buying in Canada, download our free Canada Buying Guide today.
Transferring your pounds into dollars
It’s incredibly important to establish a sensible currency strategy for all of the transfers that you will be making between the UK and Canada. We recommend enlisting the services of a currency exchange specialist like our trusted partner, Smart Currency Exchange. Although it may be your ‘go-to’ to turn to your high street bank, by doing so, you are exposing yourself to transaction fees, long wait times, and exchange rates that aren’t as competitive as you can secure with an expert. Smart Currency Exchange are specialists in helping people to purchase property overseas. They have access to live exchange rates, which means they can secure you a rate that’s typically 1-4 percent better than that offered by your bank. When you’re making multiple transfers, these savings can really add up.
Smart Currency Exchange are specialists in helping people to purchase property overseas. They have access to live exchange rates, which means they can secure you a rate that’s typically 1-4 percent better than that offered by your bank.
Get in touch with Smart Currency Exchange early in your buying journey. That way, you have access to expert information, which ensures you always make an informed choice when transferring your funds. To help you budget effectively, Smart Currency Exchange can even lock in a favourable exchange rate for up to a year, effectively setting the price of your Canadian property, and allowing you to budget for each and every transaction. To find out how much you could save, get a free quote from Smart Currency Exchange today.
The Canada Buying Guide takes you through each stage of the property buying process, with practical recommendations from our experts who have been through the process themselves. The guide will help you to: