3 Things that will make your relationship successful in Thailand

[Riley'sLife]

I have just sold some Thai property and now wish to re-invest in Canadian real estate. I am a retired Brit living in Thailand. I intend to re-sell the Canadian property after making a capital gain, pay any Canadian Capital Gains Tax, and then return the initial capital and profit to my Hong Kong bank before re-investing in Thailand or elsewhere.

Anyone know if there are any Canadian restrictions, or other pitfalls, to prevent me from doing this?

[johnnyk]

Canada has no restrictions on foreigners buying/selling property.

System is open and transparent, no chain nonsense or gazumping as in the UK.

You make your offer and if its in the ballpark buyer and seller negotiate back and forth.

During that time no other offer can come in until yours is disposed of one way or another.

Down payment/deposit is held by a third party until the closing.

Ten percent is a standard deposit to show you are serious.

Capital gains are payable if you sell the property in less than a year from buying it or if it is an investment.

If you live in it for 366 days there is no capital gains tax payable (sweet!).

But Canada is a big country and prices vary widely. Yes there are nice houses available for 100-150K stirling but they are not in the better cities/areas. For something nice (3-4 beds) in a good part of the country expect to pay 250K stirling +++.

[Riley'sLife]

Johnny, Thanks for that info. – very helpful.

What about flow of capital in and out of Canada…. Do I have to show where money has originated before I import it into Canada to enable me to take the money back out of Canada at a later date without problems?

I want to buy a $500k house in the Toronto 'burbs that I could flip immediately and make $60k, but need to be certain there are no hidden "nasties" that could be detrimental to my exit strategy. I have never done this in Canada before and need to move quickly to avoid losing the opportunity.

Cheers Rick

[shepsel]

You should investigate what part of Canada you wish to invest in as markets and values vary from Province to Province, and from city to city. Right now the west is in a boom, while there are signs of a slowdown in Ontario. In any event, you should have a paper trail of where the money is coming from showing that the money has not been laundered, and will need to open a Canadian Bank account for any transactions. There is also a capital gains tax if you sell a property within a year and don't reinvest it in another property.

When checking out a financial institution to deal with, you can look at their websites to contact them on how to open a bank account for a non-resident. Usually the bank will need at least two pieces of photo identification to open an account. The main national banks are: Canadian Imperial Bank of Commerce, Bank of Nova Scotia, Bank of Montreal, Toronto-Dominion Bank, & Royal Bank of Canada, and you can check their websites on establishing a relationship with them.

If you need any more specific information, pm me, and I will try to answer.

[johnnyk]

Riley,

Slowdown signs are also appearing in Alberta.

What areas are you thinking about? Shepsel and I can fill you in.

[Firefly2008]

Check out www.mls.ca for listings in Canada. Most houses/properties for sale are listed here where all realtors have access and increases the chances of selling something because privately listed properties do not get the exposure.

The economy, which is tied to the success of the US economy, is somewhat uncertain at this time and if the US goes into recession, which Warren Buffet thinks it already has, this will have a direct impact in Canada, especially Ontario where the economic engine is manufactuing, house prices will fall as people lose there jobs because exports to the US are reduced. That being said, real estate in southern Ontario has always been a good investment in the long term.

If you are interested in purchasing in Toronto, check Bloor West which is relatively close to downtown and is really an up and coming part of Toronto and the prices are a little lower than other areas that aren't too far from downtown.

[squashjunkie]

$60,000 flip almost sounds too good to be true. You invest $500,000 to make $60,000 in what you say is a sure thing.

Couple of things to consider. Currency costs from a couple of areas. Not only will you lose converting your money into Canadian dollars to buy the property you will need to convert it back into your desired currency once the house is sold. So there are two bank spreads to consider. Usually 1.5% to 2% per transaction.

As well, the currency will undoubtedly fluctuate during the time period from when you buy to when you sell. This could add to your gains or wipe them out. Depends which way it goes. Your guess is as good as mine. On a side note the Canadian dollar has gained 7% against the greenback in the past two months alone.

And to top it all off you pay the tax man on your capital gain of $60,000. 50% of which is taxable (could be 100% in some cases as you are looking to flip the property on a short term basis) and tax rates vary from about 30% to 48% depending on province.

All in all, a lot of risk to make 4 or 5 % on your money. But you say it is a sure thing.!!!!! Good luck!! Ever hear of too good to be true?

[Riley'sLife]

Thanks for the quality replies people. Much appreciated.

Cheers Rick