Invest in Real Estate in Canada
Updated on Wednesday 02nd June 2021
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If you want to invest in real estate in Canada, there are different options that you can choose from, as a foreigner arriving here. One of the simplest options available for foreigners is to invest in a real estate property, by completing a sale transaction. If you are interested in purchasing a property here, you can be represented by our real estate lawyer in Toronto or by our real estate lawyer in Ottawa, in the case you want to buy a property in these cities.
What are the main options to invest in real estate in Canada?
If you want to invest in the real estate sector in Canada, as a foreigner you have several options, which can depend on whether you arrive here as an individual seeking to simply invest in a local property or you arrive here with the purpose of opening a company in Canada that operates in the real estate market. In the case you want to set up a business, you can request in-depth information from our team of consultants in company registration in Canada.
In the list below, our real estate lawyer in Toronto (a city which is one of the most important Canadian cities), has prepared a short presentation on the main ways that are open for foreigners with regards to investments in the real estate market. If you want to relocate to Toronto for this purpose, we invite you to analyze the following main options:
- purchase a real estate property in Canada to be used as your primary residential address;
- house flipping – it is a modern and challenging technique through which one can purchase a property that needs to be renovated and in which the buyer will invest a certain capital with the purpose of selling it to another party for a higher price, the main purpose of it being to make a profit out of the said investment;
- purchase a property for rental purposes – here, you should always search for properties that are located in regions attractive to tenants;
- pre-sale condo assignments – it represents a popular technique in Toronto, through which you, the owner of the property, sell your rights to another party (if you are interested, our real estate lawyer in Toronto can present more details);
- another way to invest in real estate in Canada is through private mortgages.
How can one invest in real estate investment trusts in Canada?
For those who are seeking to open a company in Canada that operates in this industry, there is the possibility of establishing a real estate investment trust (REIT), which is a type of company that is specifically designed for investments in the real estate market, and which is open to a wide range of real estate investments, such as apartment buildings, office buildings, shopping centers and numerous other.
You can address to our team of consultants in company formation in Canada if you are interested in the process of setting up this company type, as well as information on the registration process, capital requirements and any other incorporation aspects. If you want to invest in the city of Ottawa, you can also be represented by our real estate lawyer in Canada. Below, you can find some compelling details on the REIT market in Canada:
- between 2015-2020, the REIT market in Canada increased by 2.6%;
- currently, the REIT market in Canada is estimated to have a value of $10 billion;
- there are approximately 90 REITs operating here, which employ 4,545 persons;
- it is necessary to know that the price of a property in Toronto increased by 17% in July 2020 compared to July 2019, even in the context of Covid-19 pandemic;
- the largest share of REIT in Canada is represented by retail REITs, accounting for 29.75%.
Canadian REITs – incorporation requirements
Those who want to open a company in Canada as a REIT will need to consult the legal requirements that they need to comply with, which are stipulated under the Income Tax Act; according to the Canadian laws, one of the requirements for company incorporation in Canada is to have a publicly listed REIT.
Another important rule is that to register a REIT that is a tax resident entity in Canada. Other rules may not apply uniformly at a national level; for instance, REITs in Ottawa are exempted from paying the income tax, while in other regions, depending on the types of investments made, the investors may be required to pay the respective tax; you can receive more details on this subject from our real estate lawyer in Ottawa.
If you want to invest in real estate and want to set up a REIT here, please contact our real estate lawyer in Toronto or our real estate lawyer in Ottawa, in the case in which you want to establish a business in any of these cities. Our team can represent you in the process of registering a business, but individuals can rely on us for the sale of a property as well.