About Purchase of Real Estate in Canada

When acquiring real estate in Canada, everything is processed under transparent procedures and there is no worry about swindling or fraud. This is because agents can handle properties both under their charge and other agents’ and all properties for purchase and sale are publicized in informative documents on Canadian real estate. In addition, it is banned for a real estate firm to possess and sell a property.
In Japan, because individual real estate companies handle different properties, customers must visit different companies separately by themselves. However, here in Canada, no matter which real estate agent you visit, the same properties will be introduced. So, you may experience an unexpected situation where you end up looking around the same properties with different real estate agents.
Because no real-estate charge is imposed on buyers here in Canada, we can introduce properties free until you find one which fully satisfies you. In addition, we help you in borrowing funds from banks here in Canada.

Application for Purchase (Offer)

Application is made in writing with a deposit. We recommend you to open a bank account in Canada at this point.

Response from the Seller

The seller’s offer for change of terms to the buyer’s offer (Counter Offer)

Reception of the Offer and the Counter Offer

Home Inspection (interior examination)

Detailed inspection of the residential building by the professional examiner (home inspector) hired by the buyer. Implemented within a specified period (normally, approximately three (3) to ten (10) days).

*Cancellation

As a result of inspection, if the buyer is not satisfied with the conditions of the property, he/she can cancel the purchase. The deposit is reimbursed except the expenses for home inspection.

Reception, Confirmation, and Approval of Various Documents.

For a condominium unit, documents such as condominium documents, management conditions, terms and reports by the board of maintenance are required.

Home Inspection (interior examination)

The buyer pays the deposit and earnest money after confirming and approving all terms and conditions. The amount is normally ten percent (10%) of the purchase price.

Payment of the Balance

The balance is paid at the lawyer’s office until two (2) days before the registration.

Completion of Registration

Registration to the recording office is conducted by the lawyer and the registration documents are directly mailed to the buyer. Because there is no legacy tax in Canada, people can inherit real estate in relief. In addition, as the right of occupancy does not exist in Canada, there is no worry about squatting after two (2) months’ advance notice. This means that you can purchase a house and rent it out to others to receive rents until you are ready to live there by yourself.

About Sale of Real Estate in Canada

Advice for the Sales Price

We will discuss with our client for the most appropriate price considering the trend of real estate market and the surrounding environment.

Preparation for Exhibition of the Property

We will advise about the layout and, if necessary, repair and reform of the property.

Placing the Property in the Market

We register the property on MLS run by the Vancouver Real Estate Association.

MLS is the total searching system to which real-estate agents belonging to the British Columbia Real Estate Association register properties under sales requests from their clients. Most of the agents handling residential real estate are members of the association. By registering sales properties on MLS, we can find good buyer candidates extensively.
Furthermore, we search for prospective buyers through open houses and marketing activities unique to us.

Open House: Open houses are held every Sunday and many people can look at properties for sale.

Analysis of Purchase and Sales Contracts

We summarize purchase and sales contracts presented by buyers and discuss them with our clients.
In addition, when necessary, we prepare counter offers and advise our clients about the prices and final purchase/sales terms.

Arrangement of Lawyers

Land registration is handled by lawyers. A seller receives the balance of the sales price after deducting taxes, the real-estate fee, the lawyer handling fee and the mortgage loan if any left.

Post Sales Procedures

We introduce our clients to accountants when we receive requests after sales.

Real-Estate Investment by Non-Residents and Taxation of Income Taxes

In the event that a non-resident investor invests in real estate not as a business but in order to obtain a real-estate income (rents), a twenty five percent (25%) withheld tax is imposed on the income which is calculated by reducing maintenance expenses, insurances, real-estate taxes, costs for repair etc. from the total income amount. Moreover, deduction of depreciation expenses in accordance with the tax code is approved when calculating income taxes. Thus, if the tax amount is smaller than the taxes withheld, the non-resident can receive a tax refund.

Taxation of Income Taxes on Sale of Real Estate

In the event that a non-resident sells his/her real-estate property, the seller must give notice to the Canada Revenue Agency regarding the sale (the name and address of the seller, the kind of the property to be sold, the estimated sales price, the acquisition cost of the property to be sold, etc.) by thirty (30) days prior to the planned sales date. In addition, the seller will pay twenty five percent (25%) of the estimated sales profit and capital gain at time of notification. the Revenue Canada issues a certificate (T2062) based on this notification and the seller can close the deal after the issuance of the certificate. The tax paid at time of notification will be treated as a partially paid tax amount when he/she files a tax return for the taxable year. In this way, under the tax code in Canada, it is required to make estimated income tax payment in advance which is expected to arise out of sale. But as another method, the seller can also pay the tax within ten (10) days of the sales date by giving notice to the Revenue Canada an amount based on the actual sales amount. In this case, the Revenue Canada also issues a certificate (T2062). However, practically, we usually take an approach to pay the tax on the sales contract date and acquire the certificate (T2062). In the case where the seller fails to give the abovementioned notification and to acquire the certificate (T2062), he/she must pay fifteen percent (15%) of the sales price of the property to the Revenue Canada.