Buying A House In Toronto – A Guide For International Buyers

Welcome international buyers! Most of you have landed here through our google ads so I’ll be short and to the point. If you have any questions at all please click the live chat button in the bottom right to speak directly to a Toronto real estate agent (no signup necessary, not even your name).


International Buyer’s Guide Summary

-What you can expect to pay for a property in Toronto

-Who can buy property in Toronto

-The issues around financing

-The logistics of searching and signing a deal

-The other costs involved (Taxes and closing costs)


What is a rough estimate of house prices in Toronto?

As of writing this (Nov 2016) Toronto is one of the hottest real estate markets around. Prices have climbed 20% year over year in certain areas. But do not fear. There are plenty of places around Toronto (which I and everybody else still consider Toronto) that we can find to fit your budget.

Take a look at this map to get a rough idea of what people consider Toronto & its suburbs. I’ve color coded the map to give you an idea of how expensive/hot the markets are in each area. Red is where prices have gone insane in the last few years. Orange is still expensive but you can find something more reasonable. Blue is more affordable, but again prices are still rising. Everywhere you go will be expensive (from a few years ago). There are pockets in the blue areas that are red hot and vice versa. This is just to give you a general idea as an international buyer.



Detached Houses:

1.3 Million to 2 million (In the heart of Toronto & popular suburbs)

700k – 1 Million (Just on the outskirts. 20-30 minute drive)

400k – 700k (Further away but still appreciating at a fast rate)


Townhouses and Semi-Detached:

600k – 2 million (Heart of Toronto & popular suburbs)

400k – 650k (Just on the outskirts)

250k – 400k (Up and coming areas further from Toronto)


Condos (Apartments)

250k – 500k for 1 bedrooms roughly 500 sqft (No specific Area. Pretty much anywhere)

500k + for 2 bedrooms and bigger sizes (No specific Area. Pretty much anywhere)


All international buyers are allowed to purchase real estate properties in Toronto (and in Canada).

Canada has an open policy when it comes to home ownership. Any non-resident is allowed to buy property in Canada, but it is important to note that home ownership is very different than residency (being allowed to come/live/study/become a citizen). You will have to do heavy research into Canada’s immigration policy if your plan is to come live in Canada. You are also considered to be a non-resident if you are a Canadian citizen who has been living out of the country for more than 6 months. This would mean the financial rules and regulations we are about to talk about will apply to you as well.


A non-resident purchasing a house in Toronto will need to put down a larger down payment

If you plan on financing your purchase, banks will require a 35% down payment. This is much larger than the 5%-10% the average Canadian resident puts down when purchasing a home. You do, however, have access to the same low interest rates as Canadian citizens. If your country does not have a tax treaty with Canada, you will only have access to fixed rate mortgages (not a big deal as the majority of homes in Canada are financed with 5 year fixed mortgages).

To qualify for a mortgage when buying a house in Toronto,  you will need a few things from your bank back home: reference letter, bank statements going back a few months, credit check and employment letters. It would be wise to open a Canadian bank account with a major bank a few months before the purchase of your house in Toronto. I would suggest opening an account with one of the big banks (TD, RBC, Scotia, BMO, CIBC) since they will have more resources to accommodate non-resident buyers. Banks like to be able to trace the source of funds. They will want to see your down payment sitting in a bank account for at least one month. Some banks will want it in the account for about 3 months. Lastly, if you are paying cash for the property (meaning you do not need a mortgage) you only have to worry about having the deposit (usually 5% of purchase price) in the bank account at the time of purchase, and the balance once you get possession of the property.

International real estate buyers should open a bank account with one of the big five major banks


Do I need to be physically present to purchase a house in Toronto?

You do not need to be in Toronto to view properties or sign documents. Many of our clients prefer to be sent pictures and videos instead of flying into town for a few days. As of July 2015, Ontario allows for electronic signatures of real estate documents. This means you can sign your Agreement of Purchase and sale from anywhere in the world with a few clicks from your mouse. We are set up with software that guides you through the paperwork and shows you exactly where your signatures are needed.



How can I search for Toronto real estate listings?

There are two ways we can go about it. The first is to set you up on a search that will send out listings to your inbox every morning. You can filter the searches for price, type of house, area etc. The system will only send out listings if there is a match. If you are more of a hands on type of person we can add you to the Collaborate system. Click here to read our review(new window will open). If you like what you read, get in touch by live chat or by email and we can add you to the system. The collaborate system allows you to search for Toronto houses, make lists, search areas, like and dislike listings and so much more. Here is an example (in order) of each:





What kind of taxes will I Have to pay if i purchase a house in Toronto?

Land transfer taxes: Payable on closing day (the day you take possession of your home). This is a tax every buyer has to pay when purchasing a home in Toronto (you do not pay this tax once you sell the property). You only pay it once and it will be done with your lawyer along with all other paperwork. Click here for a Toronto land transfer tax calculator. It is important to note that the city of Toronto imposes an extra tax on top of the Ontario land transfer tax. You will see a breakdown of both in the calculator. It is quite possible that you will be purchasing a house outside of the official “Toronto” boundary and therefore only paying the Ontario land transfer tax. Areas like Markham, Brampton, Mississauga and Richmond Hill are usually called “Toronto” when speaking in a general sense to someone not too familiar with the area. Officially they are not considered Toronto for the purpose of land transfer taxes. Here is a map of the “official Toronto” where you would pay the extra land transfer fee:




Property taxes: Anybody who owns a home will pay property tax each year. This tax helps pay for education, maintenance and other services. The payment is broken down into 4 payments throughout the year. Here is a Toronto property tax calculator. It is important to note that property tax is not calculated on your purchase price, but rather the assessed value of your home. It is quite confusing. Each 4 years the city re-assesses the value of your and all other homes in Ontario. This number usually comes in at a few hundred thousand under the actual market value. It varies a lot. 400k homes might get assessed at 200k, 2 million dollar homes might get assessed at 800k. You will be able to see the current taxes for the year on the listings that we set out. Just be aware of the assessed value when using the calculator.

Income Taxes: Once you sell your house you will be subject to capital gains tax. You will pay taxes on 50% of the net gain (the profit). It is important to note that when you sell your house, the Canadian government will hold back 25% of the Gross sale price (what the house sold for, not only your profit). This 25% is just held until you file your taxes. The 25% is much more than you will actually have to pay in taxes. The government is just taking precautions so that the money that is owed to them does not leave the country. You can file a Certificate of compliance with the Canadian Revenue Agency to reduce the holding amount to 25% of the net profit. Here is a more in depth read on income taxes as they apply to international buyers.


Review: What will you pay and when

Open a bank account and deposit funds for the deposit and downpayment. The sooner the better.

A deposit of 5% of purchase price of the property when you sign the purchase documents. This will be held in trust by the listing brokerage and applied to the final purchase balance once you take possession of the house. Upon signing the purchase and sale agreement, you have 24 hours to provide a certified cheque / bank draft or wire the deposit.

A downpayment of 35% payable on closing day (the day you get possession of the house). Your 5% deposit will be applied against this amount. If paying cash (buying without a mortgage) you will pay the full remaining balance.

Land transfer Tax payable on closing day (the day you get possession of the house). See above for an explanation of land transfer tax.

Lawyer fees, adjustments, & small fees. These will be paid on closing day as well. Lawyer fees usually come in around $1000-1500 and adjustments are a few thousand dollars if property taxes have already been prepaid by the seller. They will be broken down line by line by your lawyer. These should not be deal breakers when purchasing a house in Toronto. It is more important to be aware of deposit, downpayment and land transfer taxes.

Property Taxes are paid yearly through 4 installments. The city of Toronto will send out bills accordingly.


Get in touch through live chat/phone/text/email if you have any questions. We would love to help you purchase your home in Toronto. We pride ourselves on a quick response time (but please take into account the time change!)

Andre Pasche

Norman Hill Realty Inc
20 Cachet Woods Court #2
Markham, Ontario
L6C 3G1