Buying Property Abroad as a Canadian: What Ontario Homeowners Need to Know First
By Françoise Pollard & Keith Goldson · Keith & Françoise Real Estate Team, eXp Realty · GTA & Niagara Region
Every year, Ontario homeowners approaching retirement ask a version of the same question: should I sell, take my equity, and buy something in a warmer country? It sounds straightforward. In practice, it involves financing conditions, tax reporting obligations, construction standards, property management realities, and estate planning complications that most buyers do not fully work through before committing.
Keith and I went through this process ourselves. Two years ago we toured properties in Puerto Plata, Dominican Republic, as serious buyers. Not tourists. We looked at condos, beachfront homes, detached bungalows, and pre-construction builds across a range of price points. What we saw and learned shaped how we now talk with our downsizing clients about this decision, and why we came home without buying anything.
This is not a warning against buying property abroad. Some people make it work well. It is an honest look at the questions most vacation property brochures will not raise.
Key Takeaway
Buying property abroad as a Canadian involves far more than the purchase price. Financing terms for non-residents are typically much less favourable than Canadian rates, net rental returns shrink significantly after management fees and maintenance, estate planning across two legal systems is genuinely complex, and CRA has specific reporting obligations depending on how you use the property. Before any money moves, you need an independent local real estate lawyer you found through a trusted personal referral, and a cross-border tax accountant with direct experience in that country.
Why Ontario Homeowners Consider Buying Abroad
The logic is appealing on the surface. Sell a GTA home worth $1.2 million, pocket significant equity, buy something smaller locally, and put the remainder toward a place in Portugal, Mexico, or the Caribbean that you can enjoy for a few months a year and rent out the rest of the time.
For clients who have built real equity in their GTA or Niagara home, this question comes up regularly. The answer depends almost entirely on how honestly you stress-test the numbers and the logistics before you fall in love with a property on a tour.
What We Saw in Puerto Plata
We toured a wide range of properties in Puerto Plata: condos, beachfront homes, detached bungalows, and pre-construction builds, priced in USD from approximately $400,000 to $600,000. Some were genuinely outstanding. But across most of what we were shown, the construction quality was something an Ontario buyer would not accept here.
We noticed uneven stair risers in condo buildings where the risers were not standardized from one step to the next. Paint and finish work that looked unfinished rather than in progress. Window caulking that had already failed. And a pre-construction three-storey building where the foundation had clearly been designed for two storeys, not three. In Ontario, a home inspector and the building permit process catch these things before you spend a dollar. Consumer protections, inspection standards, title systems, and enforcement mechanisms vary significantly by country, and in many markets, the protections Ontario buyers rely on may not exist in the same form.
This is not unique to the Dominican Republic. The lesson is not never buy abroad. It is: never assume the regulatory environment you know here follows you there.
Financing as a Canadian Buyer Abroad
One of the most common assumptions Canadian buyers make is that financing abroad will be difficult or impossible. That is not always true, but the terms are typically significantly less favourable than what you are used to in Canada.
In the Dominican Republic, Scotiabank operates a non-resident mortgage program available to Canadian, American, and British buyers. Down payments for foreign purchasers typically range from 25% to 40% of the purchase price. Interest rates on foreign currency mortgages are considerably higher than current Canadian rates. The process is also significantly slower and more documentation-heavy than applying for a mortgage here. One Ontario couple we spoke with described it as taking far longer than expected, even with all their paperwork prepared in advance.
In many other countries, financing options for non-residents are more limited still. A significant number of Canadian buyers end up using a home equity line of credit on their Canadian property to purchase abroad in cash. That decision deserves a detailed conversation with your mortgage broker before you assume what your options are.
The Real Numbers Behind Vacation Rental Income
Rental income is often central to the financial case for buying abroad. The gross yield figures quoted by developers and local agents can look attractive. The net return after real ownership costs tells a different story.
In tourist markets across the Caribbean and Southern Europe, short-term property management fees typically run between 15% and 25% of rental revenue. That is before accounting for condo or HOA fees, insurance, and maintenance. Tropical climates accelerate wear significantly. Humidity and heat take a toll on everything. Seasonal vacancy during low-season months adds to the gap between what developers advertise and what owners actually net. For many buyers, renting a vacation property for several weeks per year costs considerably less than purchasing and managing one from thousands of kilometres away. That comparison is worth doing honestly before you commit.
Tax and CRA Reporting: What Canadian Owners Must Know
Tax obligations are not our expertise and we will not pretend otherwise. What we will tell you is that CRA has clear reporting obligations for Canadians who own foreign property. The rules differ depending on how you use that property.
Personal Use vs. Rental: The Key Distinction
A foreign vacation home used exclusively for personal use may be exempt from T1135 reporting. The moment you rent it out, the property becomes specified foreign property. At that point, if your total specified foreign property exceeds $100,000 CAD in cost at any point during the year, you must file Form T1135 with CRA. Rental income earned abroad must be reported on your Canadian tax return. This applies regardless of whether you also pay tax in the country where the property is located. Any capital gain on an eventual sale must also be reported to CRA.
The penalties for non-compliance are meaningful, and CRA has increased its scrutiny of foreign asset reporting in recent years. Official guidance on foreign income reporting is available directly at canada.ca. Before making any decision about foreign property, speak with a cross-border tax accountant who has specific, current experience in the country you are considering. This is not a general accountant conversation. It requires someone who works cross-border regularly.
What Happens to That Property When You Pass Away
This is the question most buyers never ask before they sign, and it matters more than almost anything else on this list.
When you own property in another country, your estate becomes subject to that country’s laws, not Ontario’s. Your heirs will need to work through the local legal system, in the local language, often with a local notary or lawyer, to transfer or sell the property. Resolution timelines can be significantly longer depending on the jurisdiction, and the process can be costly and complicated from Canada. Many Canadians eventually sell overseas properties specifically to simplify their estate and spare their families that process entirely.
This is a conversation your estate lawyer needs to be part of before you purchase. Not after.
The Lawyer and Title Search Question
Every country has its own property title and land registry system, and verifying clean title varies enormously by market. In the Dominican Republic, property title searches are conducted through the Registro de Títulos (the national land registry) by plot number, not by owner name or address. A certified title search will show current ownership, any liens, mortgages, court judgments, and any covenants or restrictions. Understanding how that system works before you make an offer is not optional.
How to Find an Independent Lawyer Abroad
In any country you are considering, you need a local real estate lawyer who is completely independent of the developer or selling agent. The best way to find one is through a personal referral from someone who has actually used that lawyer for a completed foreign property purchase. Not an introduction made by the sales team. When we were in Puerto Plata, we met local real estate professionals who gave us a ground-level view of how the market works. What struck us was how different the process is from what Ontario buyers expect. Arriving with your own independent representation already in place is not a formality. Resolution timelines in foreign legal systems can be significantly longer than anything you have experienced here. The quality of your legal representation from the start is the single most important protection you have.
Françoise & Keith
Our experience considering property abroad
Keith and I went to Puerto Plata two years ago genuinely open to buying. We were not going on a sales tour. We were going as buyers doing real due diligence. What we saw gave us pause. Among the properties we visited, the construction defects were hard to ignore: uneven stair risers in condos, paint work that would not pass any Ontario standard, window caulking that had already failed, and one pre-construction building where the foundation had been poured for two storeys but three were being framed above it. Yes, we saw exceptional homes too. But the inconsistency was the problem. In Ontario, you know what regulatory oversight looks like. There, you are trusting what you are shown.
When we ran the full picture: the mortgage terms for non-residents, the management fees, the real net rental return, what it would mean for our estate, and the fact that we would be paying full price in a currency that is not ours for a property in a country where we are not citizens, it simply did not make financial sense for us. We have no regrets about that decision. What we tell clients now is this: go with curiosity, not a signed offer. Take an independent local lawyer and a cross-border tax accountant into that decision with you before any money moves. The tour will make you want to buy. The numbers are what you need to sit with.
Keep Reading
Common Questions About Buying Property Abroad as a Canadian
Can Canadians buy property in another country?
Yes. Most countries permit foreign nationals to purchase property, though the rules, restrictions, and ownership structures vary significantly by jurisdiction. Some countries restrict foreign buyers to certain property types or geographic areas. Before purchasing anywhere abroad, verify current foreign ownership rules in that specific country with a local real estate lawyer who is independent of the selling agent or developer.
Do Canadians have to report foreign property to CRA?
It depends on how the property is used. A foreign vacation home used exclusively for personal use may be exempt from T1135 reporting. If you rent the property out, it becomes specified foreign property, and if your total specified foreign property exceeds $100,000 CAD in cost at any point in the year, you must file Form T1135 with CRA. Rental income earned abroad must always be reported on your Canadian tax return. Consult a cross-border tax accountant before purchasing.
Is buying a vacation property abroad financially worthwhile for Canadians?
It depends on the country, the property, how you plan to use it, and how honestly you calculate costs. Developers often advertise attractive gross rental yields, but short-term property management fees alone can run 15% to 25% of revenue in many markets, before maintenance, vacancy, and local taxes. For many buyers, renting a vacation property seasonally costs less overall than owning and managing one from a distance. Run the real numbers before you decide.
What happens to foreign property when a Canadian owner passes away?
The property falls under the laws of the country where it is located, not Ontario’s estate law. Your heirs must work through that country’s legal system to transfer or sell it. Resolution timelines can be significantly longer than anything your family would experience here, and the process can be costly and complicated when managed from Canada. Discuss this with your estate lawyer before you purchase.
How do you find a trustworthy real estate lawyer when buying property abroad?
Get a referral from someone who has personally completed a foreign property purchase in that specific country. Not a recommendation from the developer or selling agent. Your lawyer must be completely independent of the transaction. Independent legal representation from the start is the most important protection a Canadian buyer has in a foreign market, particularly in jurisdictions where resolution timelines can be significantly longer than in Ontario.
Weighing your options after selling the family home?
We help GTA and Niagara homeowners think through what the right next move actually looks like, whether that means downsizing locally, relocating within Ontario, renting seasonally, or deciding not to buy abroad at all.
Talk to the TeamThis post is for general informational purposes only and does not constitute financial, legal, or tax advice. Foreign property ownership involves complex cross-border tax obligations, legal requirements that vary by country, and estate planning considerations that depend on individual circumstances. CRA reporting rules for foreign property are fact-specific. Consult a licensed cross-border tax accountant and an independent local real estate lawyer with experience in the relevant jurisdiction before making any decisions. Françoise Pollard is a Realtor® and Keith Goldson is a Broker with the Keith & Françoise Real Estate Team, eXp Realty Brokerage, serving the GTA and Niagara Region.
