When you’re in the market for a home, one of the first choices you’ll need to make is whether to go for a newly constructed property or an existing one. This decision hinges on several factors, including how much time, effort, and money you’re prepared to invest.
Key Restrictions for Non-Residents
Before diving into the details, it’s essential to be aware of the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which is in force from January 1, 2023, to January 1, 2025. This law restricts temporary residents from buying residential properties in Canada, with certain exceptions:
- Study Permit Holders may purchase a home if they have spent at least 244 days each year in Canada for the five years before buying. They must also have filed income tax returns for those five years and can only purchase properties worth $500,000 or less.
- Work Permit Holders are eligible to buy a home if they have a valid work permit and have worked full-time in Canada for three of the four years preceding the purchase. They also need to have filed income tax returns for those three years.
Newly Built Homes
When opting for a new home, you generally have two main routes:
- Custom Build: Purchase land and hire a builder to construct a home tailored to your needs. This option usually requires more time and detailed planning, but it can be cost-effective.
- Pre-Construction Purchase: Buy a home that has already been built or is under construction by a developer. This route may involve higher costs but offers the convenience of quicker occupancy.
In either case, working with a real estate agent can be beneficial. In Ontario, real estate agents must be members of the Ontario Real Estate Association (OREA). If you choose to work with one, it’s important to understand the implications of signing a Buyer Representation Agreement.
New homes in Ontario are covered under the Tarion Warranty Corporation, which ensures that the home meets the standards set by the Ontario New Home Warranties Plan Act. This coverage protects you from potential issues with workmanship, materials, and building code compliance. Always verify that your builder is registered with Tarion, and use their resources to locate reputable builders and newly built homes in Ontario.
Existing or Resale Homes
A resale home refers to a property that has been previously owned and occupied. These homes may need updates, renovations, or repairs. However, many are move-in ready and have been fully renovated.
Most homebuyers choose to work with a real estate agent to find and purchase a resale property, though some buy directly from the seller. A real estate agent can help you find homes that suit your criteria, arrange viewings, assist with making offers, and help you secure financing. They also guide you through the process of closing the sale.
Summary of Key Points:
- Understand Legal Restrictions: Temporary residents face restrictions on property purchases under a law effective from 2023 to 2025, with specific conditions for study and work permit holders.
- New Homes:
- Two primary options: building on purchased land or buying a pre-constructed home.
- New homes are backed by the Tarion Warranty Corporation.
- Realtors can assist with both options.
- Resale Homes:
- May require renovations or repairs but can also be move-in ready.
- Real estate agents help with the entire purchase process.
Whether you choose a new or resale home will depend on your priorities, financial situation, and the amount of time and effort you’re willing to dedicate to the process. Each option offers its unique benefits to suit different buyer preferences.
Last modified: March 9, 2025
