Are you an American considering buying a home in Canada? Here’s what you need to know.

With the US Federal Election on everyone’s minds, you may be considering heading for Canada, depending on who wins. But buying a house in the Great White North isn’t as simple as plonking down a down payment. If you’re considering buying property in Canada as an American, here are some important things to consider.

Canada has a foreign buyers ban in place, with some exceptions.

As of 1 January 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act came into force and remains in effect until 1 January 2027. Broadly, this law prohibits foreign buyers from purchasing residential properties in Canada. Yes, this includes Americans, and it applies to most locations in Canada.

There are some exceptions, however. The law doesn’t apply to temporary accommodations like vacation homes. Additionally, Census Metropolitan Areas with a total population of less than 100,000 are exempt from the ban, as are Census Agglomeration areas with less than 10,000 people. These are Canadian legal terms, and basically define cities and towns. You can determine if a property is in one of these places by looking up its address. Most well-known Canadian cities and towns are covered by the ban according to these terms, including Vancouver, Toronto, Montreal, Calgary, Edmonton and other large population areas.

So, if you’re considering a move to Canada after the election and don’t mind living in small towns or rural areas, you could potentially purchase property here. That’s not the end of the story, though.

You don’t get any form of residency by purchasing property.

Even if you purchase a home in Canada, that does not mean you gain any sort of residency status. You must have some form of residency status to remain in Canada, whether that is a work permit or permanent residency. Purchasing property does not give you the right to remain in Canada, but Americans can stay for up to six months total per year.

If you wish to remain in Canada for more than a few months as a visitor, you need to apply for at least a work permit first. This process has become significantly more difficult, as Canada slashed its immigration targets recently. To become a permanent resident, you must already have been in the country for a while, usually on a work permit, before being allowed to apply for permanent residency.

Taxes can get weird.

If you do manage to purchase a property by working around the foreign buyers ban and earn the right to stay by securing a work permit, bear in mind you will owe taxes to two countries. If your job is also located in Canada, Americans making less than equivalent USD $120,000 for 2023 (around CAN $166,710) are exempt from paying US Federal taxes and will only have to pay Canadian taxes while living here (you will still have to report your income regardless).

But if you end up making more than this, or your job is American, you will have to pay taxes in both countries. Consider getting the help of a tax accountant anyway, regardless of how much you make, because there are also property and sales or purchasing taxes to consider when owning a home in Canada.

Americans looking to purchase a home in Canada after the election should know there are restrictions in place on foreign buyers in Canada. And even if you manage to find a place that is exempt from these restrictions, you will not gain any residency status upon purchasing a home. If you still want to buy a home in Canada once the votes are tallied, keep these facts in mind while you browse listings. You can also speak to an agent about homes available in exempt areas and ask a mortgage advisor about financing your new Canadian home.