Americans Can Buy Property In New Brunswick

As of January 1, 2023, a new law in Canada restricts non-citizens from buying residential property for two years. However, this does not apply to US citizens with a valid work permit or who are authorized to work in Canada, as long as they have at least 183 days remaining on their permit and only purchase one property.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed to reduce housing costs, which have escalated in recent years, in part due to foreign investors buying homes and leaving them vacant.

While the Act does not constitute a blanket ban, it does prevent non-citizens from buying detached homes, semi-detached houses, row houses, residential condominium units, and similar premises.

Can US citizens buy property in New Brunswick, Canada?

US citizens can buy property in New Brunswick, Canada, but there are some legal restrictions and conditions to be aware of.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act

In June 2022, the Canadian government passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect on January 1, 2023, and will remain in place until January 1, 2027. This law prohibits foreign investors who are not Canadian citizens or permanent residents from acquiring non-recreational residential property in Canada. The Act includes detached homes, semi-detached houses, condominium units, and similar premises in its definition of residential property.

Exceptions to the Act

The Act does not apply to certain groups, including temporary residents with valid study or work permits who meet strict conditions. To qualify, those on study permits must have filed the necessary income tax returns for the preceding five taxation years, been physically present in Canada for a minimum of 244 days in each of those years, intend to purchase a property for less than $500,000, and not have purchased more than one residential property. Those on work permits must have worked full-time in Canada for a minimum of three years within the preceding four years, filed the necessary income tax returns for at least three of the preceding four taxation years, and not have purchased more than one residential property.

Other Considerations for US Citizens

US citizens looking to buy property in New Brunswick should also be aware of the following:

• They will need to prove they have sufficient funds for a down payment, with the amount held for at least three months, and its source if the money comes from outside Canada.
• A bank account and a good credit report with a score of at least 680 are typically required.
• Additional documentation may be required to assess creditworthiness and debt ratio, especially if there are debts outside the country.
• Some financial institutions require a temporary resident visa (with a work or study permit) before granting a mortgage.
• A real estate agent or a licensed mortgage broker or associate can help navigate the process of buying a home and securing a mortgage.
• There are incentives and resources available for first-time homebuyers in Canada, such as mortgage loan insurance for newcomers and the Home Buyers' Plan (HBP).

In summary, while it is possible for US citizens to buy property in New Brunswick, Canada, they will need to navigate legal restrictions and ensure they meet the necessary conditions and requirements.

What are the restrictions on US citizens buying property in New Brunswick?

As a US citizen, you can buy property in Canada, including in New Brunswick. However, there are some restrictions in place.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act

In June 2022, the Canadian government passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect on January 1, 2023, and will last until January 1, 2027. This law prohibits foreign investors who are not Canadian citizens or permanent residents from buying non-recreational residential property in Canada. This includes properties such as detached homes, semi-detached houses, condominium units, and similar premises.

Exceptions to the Act

The Act does not include the following:

• Diplomatic or consular officers
• Temporary residents with a study permit who meet certain conditions, such as having filed income tax returns for the preceding five years, being physically present in Canada for at least 244 days each year during that period, purchasing a property that does not exceed $500,000, and not having purchased more than one residential property
• Temporary residents with a work permit who meet certain conditions, such as having worked full-time in Canada for at least three years in the preceding four years, having filed income tax returns for at least three of the preceding four years, and not having purchased more than one residential property
• Temporary residents who have been granted a visa as refugees fleeing a conflict
• Asylum seekers, under certain conditions

Other Considerations for US Citizens

As a US citizen, you will need to be aware of the following when buying property in New Brunswick:

• You will need to prove that you have sufficient funds for a down payment. The amount must have been in your possession for at least three months, and if the money comes from outside Canada, you must be able to prove its source.
• It is recommended to have a bank account and a good credit report, with a score of at least 680. If you do not have a credit history in Canada, you can provide proof of paying your bills on time for public accounts for the last 12 months.
• Some financial institutions require a temporary resident visa (with a work or study permit) before granting a mortgage, so it is important to understand the requirements of different banks before choosing one.
• You will need to provide various documents when buying property in Canada, including proof of identity, proof of address and residence status, proof of income, and proof of affordability.
• Buying property in Canada does not grant residency or change the terms of your visa.

What is the process of buying property in New Brunswick?

The process of buying property in New Brunswick is similar to that of buying property in other parts of Canada and the US. Here is a step-by-step guide to help you navigate the process:

Step 1: Decide on your budget

Before starting your property search, it is important to determine your budget. Consider your financial situation and future plans. Can you afford to buy a property? What is your maximum budget? Remember to factor in additional costs such as legal fees, property taxes, utility adjustments, and moving expenses.

Step 2: Get pre-approved for a mortgage

Meet with a mortgage broker or associate to discuss your options. They will help you understand how much you can borrow and what your interest rate might be. They will also guide you through the complicated process of getting a mortgage and ensure that you meet all the necessary requirements.

Step 3: Find a real estate agent

Consider working with a professional real estate agent who can guide you through the process of buying a home. They can help you navigate the market, find properties that match your criteria, and coordinate viewings.

Step 4: Start your property search

With the help of your real estate agent, begin your search for properties that meet your needs and budget. Research the market and visit potential properties to find the right one for you.

Step 5: Make an offer

Once you have found a property that you want to purchase, it is time to make an offer. Work with your real estate agent to prepare a written offer, also known as an "offer to purchase" or "agreement of purchase and sale." This is a legally binding contract, so be sure to carefully consider your decision before signing.

Step 6: Finalize your mortgage

If your offer is accepted, go back to your lender or mortgage broker to finalize the details of your mortgage. They will tell you what documents you need to provide and guide you through the application process.

Step 7: Hire a lawyer

Hire a lawyer to handle the legal aspects of the property transfer. They will review and prepare the necessary contracts and ensure that all conditions of the sale are met.

Step 8: Inspect the property

Schedule a final inspection of the property before closing the sale. This is your opportunity to ensure that the property is in the same condition as when the contract was signed and that any agreed-upon repairs have been completed.

Step 9: Close the sale

Attend the closing meeting, where you will sign the necessary documents and make the final payment. At this meeting, the deed and other legal documents will be transferred to you, and you will receive the keys to your new property. Congratulations! You are now the official owner of your new home in New Brunswick.

What are the costs involved in buying property in New Brunswick?

For most people, buying a home is the largest single investment they will make, so it's important to be aware of all the costs involved. Here is a breakdown of the costs you may encounter when buying property in New Brunswick:

• Down payment: Typically, you will need to pay at least 5% of the purchase price as a down payment. If you are a non-permanent resident, the minimum down payment required is 10%, while it could be 5% for a temporary resident.
• Legal fees and disbursements: You will need to pay legal fees and disbursements during the buying process.
• Property tax and utility bill adjustments: The buyer is usually responsible for repaying the seller for any amounts the seller has prepaid.
• Mortgage insurance: If your down payment is less than 20% of the purchase price, you will typically need to purchase mortgage insurance.
• Tax on the purchase price: This may apply for new constructions.
• Upgrades: You may need to budget for upgrades if you are buying a new construction property.
• Moving and setting up costs: Costs may include landscaping and yard maintenance tools, movers and/or a moving truck, boxes and moving supplies, and utility setup charges such as security deposits.
• Regular repairs and maintenance: These are the normal, ongoing costs of owning and maintaining your home.
• Large, irregular costs: These are more expensive costs that you will likely incur at some point, such as major repairs or renovations.
• Closing costs: These typically range from 1.5% to 4% of the purchase price and include fees such as land transfer tax, title insurance, legal fees, land survey fees, mortgage application fees, appraisal fees, and estoppel certificate fees.
• Prepaid bills: You will need to reimburse the seller for any prepaid bills, such as property tax.
• Monthly mortgage payments: This includes paying towards both the principal balance and the interest.
• Property taxes: Property tax is typically calculated as a percentage of your home's value and can range from 0.5% to 1.25%, depending on the municipality and province/territory.
• Property insurance: This covers the cost of any damages to your home or its contents.
• Utility bills: You will be responsible for paying for utilities such as heat, hydro, gas, water, cable, internet, and phone.
• Condo fees: If you are buying a condo, you may need to pay monthly condo fees, which can include maintenance of common areas, garbage disposal, and some utilities.
• GST/HST: If you are buying a new build, you may be subject to GST/HST, which varies by province.
• Commission fees: While the buyer does not pay commission fees, it is important to be aware that the seller typically pays a commission fee of 5-6% of the purchase price, which is split between the buyer's agent and the seller's agent.

What are the mortgage options for US citizens buying property in New Brunswick?

As a US citizen, you can buy property in New Brunswick, Canada, but you will be subject to certain restrictions. The "Prohibition on the Purchase of Residential Property by Non-Canadians Act" prohibits foreign investors who are not Canadian citizens or permanent residents from purchasing residential property in Canada. This includes detached homes, semi-detached houses, residential condominium units, and other similar premises. The Act does not include recreational properties, such as vacation homes and cottages, or homes outside of census metropolitan areas (cities with populations higher than 100,000).

If you are eligible to purchase property in New Brunswick, you may be able to obtain a mortgage from a Canadian bank or lender. However, as a non-resident, you will typically need to meet several criteria, including:

• A larger down payment, typically around 35% of the property's cost.
• A reference letter from your bank.
• An employment letter verifying your income.
• Bank statements for the last three months.
• A Canadian credit check.

It is important to note that the requirements may vary among banks and lenders, with some being more stringent than others. You may also need to consider additional costs such as legal fees, property taxes, and insurance.

• Build your Canadian credit history: You can start building your credit history in Canada by paying your phone or cable bills. You may also consider getting a credit card designed for newcomers, which can help you establish a credit score.
• Get a mortgage pre-approval: You can get a pre-approval from a bank or lender to determine how much you can borrow and what your interest rate might be. This will also give you a better idea of how much down payment you will need.
• Find a real estate agent: A local real estate agent can help you find a property that meets your needs and guide you through the purchase process.
• Understand the closing costs: As a non-resident, you will need to budget for additional closing costs, such as the Non-Resident Speculation Tax, land transfer taxes, legal fees, and property taxes.

Frequently asked questions