This buying guide gives an overview of buying and owning a ski apartment or ski chalet in Canada. As with any property purchase, it is important to get expert advice.
Purchasing property in Canada is relatively straight forward, and there are no restrictions on EU nationals purchasing a ski property provided less than six months per year are spent in Canada. The only restriction in place is associated with the purchase of property in Banff which is a national park, and as such, only business owners and employees may purchase property there.
Selecting the Real Estate Agent
Unless purchasing from a developer, anyone making a purchase of any kind of real estate in Canada needs to register with a qualified and licensed Realtor. Unlike European Estate Agents, properties are available for all agents and realtor’s to sell so there is no need to contact multiple agencies.
Purchase and Sales Contract
Properties in ski resorts in Canada fall into two main types: new builds and re-sales.
New build properties
New build properties are defined as those dwellings sold within five years of completion of construction or restoration. When buying a newly built home up to $350,000, purchasers are entitled to a rebate of 36% of the GST, up to $8,750. Between $350,000 and $450,000, the rebate is reduced on a sliding scale, and there is no rebate on homes above $450,000. The rebate can be assigned to the builder at the time of purchase, or you can claim it directly afterwards.
These are sold by private owners or estate agents. The buyer purchases the property freehold and is free to use, rent, renovate or sell the property. There is no restriction on re-sale, though capital gains tax and VAT may be payable.
Lawyers (or notaries in Quebec) review the Offer to Purchase, search the title and draw up mortgage documents and oversees the closing details. Legal fees are generally negotiable (subject to a minimum of CAD500 plus GST/HST), depending upon the province, the complexity of the sale-purchase process and the value of the property.
Real estate agent´s fees are negotiable between 3% and 7% of the property value, plus 6% GST. Typically, realtors charge 7% on the first CAD100,000 of the sale price and 3% on the remainder. The vendor normally pays for the agent´s fees but in certain cases there are two agents involved - the seller´s agent and the buyer´s agent.
Please read our Canadian mortgage guide for more information.
If you propose to use mortgage funds from your resident country (i.e. outside of Canada) to buy your property, currency risk and fluctuation must be taken into account.
Payments for New-Builds
Payments for new-builds are usually made in stages:
Estoppel Certificate Fee
This $100 fee only applies if you are purchasing in a condominium or strata property. Rather than purely appraising the value of the condo, an estoppel certificate verifies the legitimacy and fiscal health of the condominium corporation or strata council. It ensures the condo is in good condition, or if it’s a new unit still under construction, it ensures the project is viable and the financials are in good shape.
An annual real estate tax is collected by each Province. The tax rate ranges from 0.5% and 2.5% and is based on the assessed value of the real estate, which is generally below the property's market price.
As well as this tax, additional running costs include: utility bills, service charges associated with general maintenance.
Rental agencies operate in the majority of all major ski resorts in Canada, providing full rental and management services, typically for 7%-11% commission depending on the type of property and its location.
There are currently two categories that a non-Canadian resident will fall into:
Non-residents who earn income in Canada from properties they own in Canada are subject to tax by the Canadian Revenue Agency (CRA). Income tax is calculated separately from other taxes, and may be based on gross or net rental income for the taxation year. The taxation year for individuals and certain other entities begins January 1st and ends December 31st. For corporations, it is their regular fiscal year-end.
Property Transfer Tax
The tax rate is one per cent on the first $200,000 of the property's fair market value and two per cent on the remaining fair market value (not including Alberta, rural Nova Scotia or Saskatchewan).
Capital Gains Tax
Only 50% is liable to tax at your marginal tax rate in the year of the gain. It is possible to deduct selling and purchase costs, capital expenditures and costs incurred during improvements and renovations.
Goods and Services Tax
The 5% GST applies to the purchase price of newly-constructed and substantially renovated homes. In addition, a temporary transition tax of 2% may apply on the purchase price of a new home where construction or substantial renovation of the new home was at least 10% complete before April 1, 2013, and either possession or ownership of the new home transfers, or a deemed sale of the new home transfers, before April 1, 2015.
Canada does not impose a wealth tax.
Inheritance/ Succession Tax
There is no Inheritance or Estate Tax in Canada. However there maybe tax to pay in the Country of Residence.