Can Americans Buy Property in Canada?

Can US citizens buy property in Canada? The answer to this question isn’t as simple as a yes or no. Right now, the Canadian government has certain restrictions in place regarding who can (and can’t) buy real estate.

On top of that, regulations can change based on whether you’re looking to buy a house you’ll live in full time, or a vacation property – such as a cottage.

If you’re looking to buy property in Canada’s stunning Cottage Country as an American citizen, this blog is for you. We’ll look at what makes buying a cottage in Ontario so advantageous, and what you need to know as you navigate the market as a non-Canadian.

A quick note: As with any legal topic, specific legislation regarding Americans and non-residents buying property can change at a moment’s notice. For personalized, situation-specific advice, it’s a good idea to speak directly with a professional, such as a real estate agent or lawyer.

Looking to buy a cottage in Ontario? Explore our featured listings.

Understanding Canada’s Foreign Buyers Ban

Canada’s Foreign Buyers Ban, aka the Prohibition on the Purchase of Residential Property by Non-Canadians Act, was enacted back in 2023 with the intention of making homeownership more affordable and accessible for Canadians. It will remain in effect until at least January 1st, 2027.

In terms of who isn’t eligible to buy property in Canada, most restrictions apply to non-residents, i.e. individuals who do not hold Canadian citizenship, permanent resident status, or a temporary residence permit.

If you’re not a Canadian resident, most real estate will be off-limits. However, there are a few key exceptions. For example, non-residents (including Americans) can still buy vacation properties in qualifying areas – including a sizable portion of Ontario’s Cottage Country.

On the hunt for more insights on cottage ownership? Read these other blog posts next!

Buying Real Estate in Canada With Dual Citizenship

Dual citizens who possess both Canadian and American citizenship (or any other country) are not impacted by the Foreign Buyers Ban. However, if you live in the United States full-time, you could be subject to certain financial penalties related to your real estate purchase despite holding Canadian citizenship.

For example, if you rent out your Canadian cottage, the income you make could be subject to taxation in both countries. You’ll want to consult a cross-border tax expert to understand the exact implications.

Buying a Vacation Property in Canada as a US Citizen

No matter where you’re from, if you’re thinking about buying a cottage in Canada, there are a few things you should know before you head to the market.

Crafting Your Budget

Having a carefully defined budget is necessary for any real estate investment, but it’s especially critical for Americans who are looking to buy in Canada. Although the exchange rate is generally favourable, you may still face certain hurdles when financing a vacation property in a new country.

For example, Canadian lenders may not accept or recognize your US credit history when analyzing your financial resources. As a non-resident, you’ll also face an elevated down payment minimum of 35%.

Be Aware of Other Costs

In addition to the property itself, your budget should also consider the various one-off costs that will also factor into your purchase. For example, Ontario currently imposes a 25% Non-Resident Speculation Tax on all properties bought by non-Canadians. This is in addition to the standard provincial Land Transfer Taxes, which can also be costly.

There will also be ongoing expenses to prepare for, such as management services, insurance, and annual property taxes.

Optimize Your Investment

When you buy a property in Cottage Country, you’re unlocking more than just a getaway destination for your family. Cottage properties in Ontario are in high demand – and not just among buyers. As an owner, you can tap into the red-hot rental market, earning passive income from day one.

Partner With a Cottage Country Real Estate Agent

Cottage Country is unlike anywhere else in the world – especially when it comes to real estate. In order to make the most of your upcoming purchase, you’ll want to partner with a professional expert who directly specializes in the area’s standalone micro markets and properties. That’s where we come in – Cottage Vacations Real Estate.

Looking to buy a cottage? You’ll find even more buying advice in these blog posts!

Cottage Vacations Real Estate: Your Link to Cottage Country

Whether you’re searching for the perfect backdrop to your summer holidays, a refined, stress-free investment venture, or opportunities to leverage your existing cottage as an income-generation tool, Cottage Vacations Real Estate is a dedicated partner in your success.

As leaders in Cottage Country’s dynamic real estate landscape, we can help you find the right property for your lifestyle and your portfolio. Taking an educational approach, we’ll guide you through the unique complexities of purchasing and owning a property as a non-resident – including strategies for tax mitigation to help you hold onto more of your returns.