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Even though it is often challenging to invest in real estate abroad, it can prove to be quite a lucrative endeavour. It enables you to diversify your portfolio, grow your income, enjoy unique tax benefits, and more. To start, first you must find a healthy real estate market to invest in, and Canada might just be the best place for you.
From Winnipeg to Edmonton, Victoria to Regina, Canadian cities across provinces have been attracting foreign CRE investors for years, even now during the pandemic. Canadian CRE, such as multifamily and mixed-use spaces, have proven to be resilient during 2020 with expectations that they will continue to be top-performers in the coming years.
Lets take a look at some of the main benefits of investing in Canadian real estate.
Healthy Economy and Real Estate Market
Despite the harsh global impacts of the COVID-19 pandemic, Canada remains one of the world’s most stable economies. It boasts low unemployment rates and healthy economic activity across provinces. Activity in the real estate market remains high with a growing demand for rental properties, presenting lucrative opportunities to landlords and investors alike.
Canada also has a transparent and free market, which means you can find the data you need to make a sound investment. This information is both accessible and available.
Rising Demand for Rental Properties
There are two main drivers behind the rising demand for rental properties in Canada – immigration and education.
Montreal is a magnet for immigration. Up until 2020, many Canadian provinces have seen a stable influx of immigrants, which directly impact the rise in demand for rental properties in some of Canada’s largest cities. Since COVID-19, immigration declined due to travel restrictions but that has not slowed down the demand for rental properties.
Affordable universities and respectable higher education institutions continue to attract domestic and international students, further increasing the demand for rental real properties.
Easy Taxation for Foreign CRE Investors
Foreign investors typically have to go through hoops to buy CRE properties in other places around the world. However, Canada has a simplified process and treats both domestic and foreign investors in the same manner. As a foreign investor in Canada, all you must do is follow the same procedures and meet the same obligations as any local Canadian investor, then you will receive the same tax benefits.
Some of the tax advantages include:
- Local financing
- Tax flexibility
- 4% annual amortization of the purchase price
- Light taxation on property income
As a foreign landlord you are truly subject to the same rules as a Canadian landlord. This is huge as there are no complicated or tricky laws to worry about.
Considering the steady growth of the Canadian CRE market for the last 20 years, the advantageous taxation, and the rising demand for rental properties, a foreigner can enjoy many benefits from investing in Canadian real estate.
Staying focus on healthy commercial real estate markets that offers the best possible ROI is how you stay on the bright side of investing. Canadian CRE has proven to be most resilient during the pandemic and for the last 20 years. As such, if you want to diversify your portfolio and maximize your potential ROI, investing in Canadian CRE could bring great benefits and opportunities.