Canada does not prohibit foreigners from purchasing real estate on its territory, but a federal law adopted at the end of 2022 has significantly changed the situation. Since January 1, 2023, the purchase ban has been extended until January 1, 2027 for individuals who do not hold Canadian citizenship or permanent residency.
For a French person considering buying a house in Canada, the first question is therefore not budgetary: it concerns residency status and the exceptions provided by federal regulations.
Further reading : How to distinguish between a buzzard and a sparrowhawk in nature?
Federal Ban on Real Estate Purchases: What the Law Really Aims At
The law prohibiting the purchase of residential properties by non-Canadians does not function as a blanket ban. It targets specific categories of properties and geographic areas. Residential housing located in census metropolitan areas and census agglomerations are the main focus.
A property located outside these areas may, in certain cases, escape the ban. Similarly, properties with four or more units are not covered by the law. This detail opens a loophole for foreign investors interested in multiplex rentals, including French nationals without permanent residency.
Further reading : Essential Tips for Organizing a Perfect and Unforgettable Wedding
Temporary residents holding a work or study permit may sometimes buy under specific conditions related to their status and duration of stay in Canada. As explained by several specialized analyses, this is not an automatic right: each situation must be verified before making an offer. A comprehensive guide helps understand how to buy a house in Canada according to Le Petit Monégasque while considering these recent restrictions.
The federal government relaxed some provisions on March 27, 2023, by adding exceptions. Field reports vary on the actual ease of applying these exceptions, as interpretation differs by province and the notaries involved.
Mortgage Financing for a French Non-Resident Buyer
Obtaining a mortgage in Canada without permanent residency remains the main point of friction. Canadian banks impose significantly higher down payment requirements on non-residents than on residents. Where a Canadian can make a reduced down payment, a non-resident often has to provide a much larger contribution, sometimes double or more.
The credit history poses another obstacle. Canadian financial institutions assess creditworthiness based on a local credit history. A newly arrived French person does not have one. Building this history takes time: opening a Canadian bank account, regularly using a local credit card, and demonstrating responsible management over several months.
Proving the Source of Funds
Canadian regulations require demonstrating that the funds intended for the down payment have been held for at least three months. If the money comes from France, the bank will require documented proof of the origin and transfer. Currency exchange fees between euros and Canadian dollars represent an additional cost, varying depending on the provider chosen for the international transfer.
- Canadian bank account opened before searching for the property, to establish a minimal history with the lending institution.
- Translated and certified French bank statements, covering at least the last three months, with justification of the source of funds.
- Mortgage pre-approval requested in advance, which allows knowing the borrowable amount and legitimizing the purchase offer to the seller.
Role of the Real Estate Broker and Provincial Specificities in Quebec
The process of purchasing real estate in Canada almost systematically involves a real estate broker. In Quebec, the broker is regulated by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). Their commission is generally paid by the seller, which does not directly increase the buyer’s costs.
Quebec has legal particularities compared to the rest of Canada. Quebec civil law, inspired by French law, governs real estate transactions, unlike other provinces that operate under common law. The deed of sale in Quebec is received by a notary, not by a lawyer, which may reassure a French buyer accustomed to this system.
Pre-Purchase Inspection and Purchase Offer
The purchase offer in Quebec is a legally binding document. It generally includes an inspection condition, which allows the buyer to withdraw if major defects are discovered. The pre-purchase inspection is not mandatory, but neglecting it exposes one to costly surprises, especially in older homes where insulation, roofing, or plumbing may require heavy repairs.
- The seller’s declaration details the known condition of the property (defects, completed work, past damages). This document is specific to Quebec and does not exist in this form in all provinces.
- The municipal assessment provides a reference value for the property, but it does not always reflect the market price. The gap can be significant, both upwards and downwards.
- Transfer duties (known as “welcome tax” in Quebec) are added to the purchase price and vary according to the property’s value and the municipality.
Taxation and Reporting Obligations for a French Owner in Canada
Owning real estate in Canada as a French tax resident creates a double reporting obligation. Canada taxes rental income earned on its territory, and France requires reporting all worldwide income, including Canadian income.
The Franco-Canadian tax treaty provides mechanisms to avoid double taxation, but the concrete implementation depends on the nature of the income (rental, capital gains on resale) and the exact status of the owner. A non-resident Canadian selling a property in Canada is subject to withholding tax on the capital gain, the rate and partial refund procedures of which require the intervention of a tax advisor familiar with both jurisdictions.
The administrative complexity associated with owning real estate in Canada from France should not be underestimated. Remote management fees, cross-border taxation, and currency risk transform what seems like a standard purchase into a setup that requires rigorous preparation, well before signing with the notary.