With the Canadian dollar rising at an unbelievable pace of late, it’s not surprising to discover that a recent survey discovered that 1 out of 5 Canadians is thinking about buying some US property.
The loonie is at its highest level in three years and the cost of housing in some US states is down by 50%, so it’s a no-brainer that many Canadians are tempted to scoop us some US real estate.
Unfortunately, buying property in the US isn’t as cut-and-dry as one would hope:
• You must file a tax return on the property – yes, even if you’re not renting it out to anyone.
• You have to report your income in both Canada and the US if you are renting it out. The rental income is subject to a 30% withholding of the gross rent in the US.
• You need to apply for an Individual Taxpayer Identification Number to file your taxes (similar to a Social Security Number).
• You might have to file state taxes, depending on your location.
Should Canadians buy homes in the US?
So maybe it is worth buying property in the US considering it is incredibly cheap, but if you’re the kind of person who can’t deal with myriad headaches, you may be better off purchasing real estate in Canada.