10 facts about real estate in Canada that you may not know!

Foreign Ownership Restrictions Apply, But with Nuances:

While there’s a recent ban on non-resident, non-Canadian buyers for a two-year period, it’s important to understand the details. This restriction applies to single-family homes and condos but excludes existing foreign owners, recreational properties like vacation homes, and new pre-construction condos purchased with a deposit before the ban.

Land Transfer Tax Can Be a Surprise:

First-time buyers often underestimate the Land Transfer Tax, a provincial tax levied on the purchase price of real estate. This tax varies by province and can add a significant chunk to closing costs, especially in expensive markets like Toronto and Vancouver.

Private Mortgage Insurance (PMI) Isn’t Just for Small Down Payments:

In Canada, even with a 20% down payment, you might still need PMI depending on the type of mortgage you choose. This additional insurance protects the lender in case of default. Understanding PMI options and their impact on monthly payments is crucial.

The Housing Market Can Be Hyper-Local:

National real estate trends often mask significant variations within provinces and even between neighborhoods in the same city. While affordability concerns dominate national headlines, specific regions might offer more opportunities for first-time buyers. Researching your target location is essential.

There’s More Than Just the GTA:

The Greater Toronto Area (GTA) receives a lot of real estate spotlight, but Canada boasts diverse markets across the country. Cities like Montreal, Calgary, Ottawa, and Halifax offer attractive options with potentially better affordability and distinct lifestyles compared to the GTA.

The Crown Still Owns Most of the Land:

A surprising fact for many is that a vast majority of land in Canada (around 90%) is owned by the Crown, which refers to the federal or provincial governments. This means individuals and private entities only own the buildings and other improvements on the land, typically leasing the land itself for a set period. While homeowners own their property, it’s important to understand this underlying land ownership structure.

Tiny Homes Can Be Big on Legality:

The tiny home movement has gained traction in recent years, but navigating regulations can be tricky. Tiny homes built on wheels are generally considered Recreational Vehicles (RVs) in Canada and may face limitations on where they can be parked or used. However, tiny homes built on foundations may be subject to regular building codes and permitting processes. It’s crucial to research local regulations before investing in a tiny home.

There’s a Historical Property Tax Exemption:

If you’re fortunate enough to own a property designated as a heritage building, you may be eligible for significant property tax breaks. These designations recognize the historical and architectural value of certain properties, and local municipalities often offer tax incentives to owners who maintain these heritage buildings.

The Rise of Co-Living:

Co-living arrangements, where individuals share common living spaces in a single dwelling, are a growing trend, particularly in urban areas. This can be an attractive option for young professionals or those seeking a more affordable and social living environment. Understanding the co-living market and its potential benefits can be valuable, especially for first-time renters or buyers considering investment properties.

The Seller’s Disclosure Package:

In most Canadian provinces, including Ontario, sellers are obligated to provide a disclosure package. This document outlines the property’s condition, history, and any known issues. Savvy buyers should carefully review this document, potentially raising questions with their agent or lawyer to ensure a clear understanding of the property’s state.