Buying a Vacation Home in the US

For many Canadians, the idea of escaping harsh winters or enjoying a warm-weather retreat is incredibly appealing. With its diverse climates, countless vacation hotspots, and relatively affordable property options, the United States has become a prime destination for Canadians looking to buy a home in the US for vacation purposes.

Can a Canadian Buy a Home in the US?

One of the most common questions for Canadians considering property south of the border is whether they’re legally allowed to do so. The good news is that there are no restrictions preventing Canadians from buying a home in the US. As a Canadian citizen, you can purchase property like any other buyer. Whether you’re looking for a vacation condo in Florida or a mountain retreat in Colorado, homeownership in the US is entirely within reach.

That said, purchasing real estate in another country comes with its own rules and considerations. You don’t need a US visa or residency status to purchase property, but owning a home in the US does not grant you the right to live there full-time. Canadians can typically stay in the US as visitors for up to six months per year without requiring special visas. If you plan to spend more time at your property, you may need to explore visa options.

Financial Considerations When Buying a Vacation Home in the US

For Canadians buying homes in the US, understanding the financial aspects is crucial to ensure a smooth purchasing process and long-term affordability. Here’s a breakdown of the key financial considerations when buying a home in the US:

• The value of the Canadian dollar against the US dollar can significantly affect the cost of your property. A weaker Canadian dollar means you’ll need more CAD to cover the USD purchase price. To manage this, consider locking in exchange rates through a foreign exchange service or working with a financial institution specializing in cross-border transactions.
• Canadians can obtain financing for US properties, but the process differs from getting a mortgage in Canada. Many Canadian banks with US operations offer cross-border mortgage solutions for Canadians buying homes in the US. These programs allow you to leverage your Canadian credit history and assets.
• Unlike in Canada, down payments for US properties tend to be higher, often ranging from 20 percent to 30 percent of the purchase price, depending on the lender and your financial profile.
• If you opt for a US mortgage, you’ll typically need to provide documentation such as proof of income, credit history, and details about your Canadian assets. Cross-border lenders streamline this process by offering solutions specifically for Canadian buyers, making it easier to secure financing without establishing a separate US credit history.
• Property taxes are determined at the local level and can vary widely depending on the state, county and municipality where your vacation home is located.
• Beyond the purchase price, owning a vacation home comes with ongoing expenses like insurance, utilities, maintenance, and HOA (homeowners’ association) fees, if applicable. Insurance costs may also be higher for properties in areas prone to natural disasters, such as hurricanes or flooding.
• Owning US property as a Canadian comes with specific tax considerations. For example, you may need to report rental income (if applicable) on both Canadian and US tax returns. Additionally, if you sell the property in the future, you could be subject to capital gains taxes.

Steps to Buying a Vacation Home in the US

While the process of buying a vacation home in the US may feel familiar, there are differences to consider. Here is a guide to help you purchase your dream vacation property in the US:

1. Assess your finances to understand how much you can afford to spend. If financing is required, explore cross-border mortgage options early in the process.
2. Identify the region or state that meets your needs. Consider factors like climate, lifestyle preferences, amenities, and proximity to airports or major cities.
3. Hire a real estate agent with experience with international buyers.
4. If you’re not paying in cash, get pre-approval for a US mortgage to understand how much you can borrow. Work with a lender specializing in cross-border financing to simplify the process using your Canadian credit history.
5. Visit potential properties in person or take advantage of virtual tours if travel is not feasible.
6. Once you’ve found a property you love, work with your real estate agent to submit a formal offer.
7. After your offer is accepted, schedule a professional home inspection to assess the property’s condition. Verify zoning regulations, HOA rules (if applicable), and any local laws that could impact your use of the property.
8. If financing is part of your purchase, work with your lender to finalize the mortgage approval process. Ensure all required documentation—such as proof of income and identification—is submitted on time.

Once closing is complete, you’ll receive the keys and officially become the owner of your US vacation home!

If you’re ready to start your journey toward finding the perfect vacation property, let the experts at RE/MAX Canada help make your dream a reality. Contact your local real estate agent to help you find your ideal vacation home in the US!