Canada Real Estate Market
Canada has one of the highest life expectancy rates, overtakes Japan in terms of education and for several years has been named by the UN as the best place in the world to live by a combination of the most important criteria (real income, ecology, culture and art, education, crime rate, etc. .d.). A calm country with a high standard of living annually lures the best young specialists from around the world. It is too boring for the Russian character, but many years of constancy in everything nevertheless attracts our compatriots, longing for peace.
Canada is the second largest country in the world after Russia (9.9 million square kilometers). However, a population of 32.3 million people (about five times less than in Russia) makes Canada one of the least populated countries in the world. Occupying approximately half of the North American continent, Canada has a strong and well-developed economy: GDP per capita is about $ 38,382. For eight years, prices in the Canadian real estate market continued to rise. From 1999 to 2006, they grew by 74% (49% in real terms). Moreover, the most significant increase in the price index for primary and secondary real estate since 1990 was observed between December 2005 and December 2006. Western provinces took the leading place in terms of growth in property prices. For example, in Alberta, real estate prices rose by 29.5%, which in monetary terms averaged $ 282,686 in 2006, compared with Canadian $ 249,365 in 2005. The most expensive in terms of pricing for real estate remains British Columbia, where the average price on the secondary market of real estate is 387,062 Canadian dollars.
The housing boom has been driven by three key factors: a strong economy, high immigration, and low mortgage rates. While Canada’s economy remains strong, the country continues to attract immigrants. Between 2001 and 2006, the population of Canada increased by 5.4%, with a two-thirds increase in population due to international migration. The most prosperous in terms of economic situation, the province of Alberta attracts the largest number of immigrants, followed by Ontario and British Columbia. Most migrants first rent a house, and then already buy a house.
At the beginning of 2007, experts’ forecasts spoke of a further increase in property prices in Canada, both taking into account general global trends and due to economic growth in the country, growing incomes and an increase in the number of jobs that increase demand for real estate. However, already at the beginning of 2007, experts started talking about the fact that the real estate market is becoming more and more balanced – demand is falling, and supply is growing – and expected that this would lead to a more moderate increase in property prices. In 2008-2009, property prices in Canada fell even more. At the same time, experts predict a resumption of growth in real estate prices after the global economy emerges from the crisis.
Taxation in Canada
Income tax. In general, revenues are taxed at the federal and regional levels. In all provinces, with the exception of Quebec, the Canadian government levies taxes on behalf of the regional or territorial administration. As a rule (but not always), the procedure for calculating revenues in the provinces is consistent with federal laws. The size and procedure for taxation are adjusted annually in accordance with the requirement of law. As a rule, non-Canadian citizens who have income from rental property in Canada are taxed at 25% of the total income. This amount is withheld by the tenant or property manager.
It is generally accepted that for non-Canadian citizens, the payment of this 25 percent withholding tax is the final tax liability for Canada. However, in accordance with Section 216 of the Income Tax Law, persons who are not citizens of this country and who receive rental income have the right to choose another scheme – to draw up an income tax return. Having chosen this option, a person who is not a citizen of this country is taxed on net rental income in the amount established by the state. Non-citizens of this country who prefer to act under Article 216 are also required to pay an additional tax of 48% in accordance with their obligations to pay federal taxes. However, they are not required to pay regional taxes.
The deductible expenses include a discount on depreciation (capital repair costs, CCA *), advertising, insurance, interest, maintenance and repair costs, management, payments to official bodies and lawyers, administrative expenses, property taxes, travel expenses, payment of utilities, etc.