Guide for Canadians Buying Real Estate Property in Europe
Are you looking to snag a prime piece of hot property somewhere in sunny Europe? Discover your European home-buying destinations as a Canadian.
Are you tired of waiting for the housing bubble to burst in Canada? Need to retire somewhere warmer, sunnier, and quieter? Or perhaps you're looking for cash positive investment that can generate more bang per buck.
Whatever your reasons, there's always a good excuse to buy real estate in Europe. If you're new to the European property market, you'll need to do some deep digging and research. This guide is the perfect kickstart to help you find the ideal European property as a Canadian.
Why buy property in Europe?
One of the most interesting fun facts about buying property in Europe is that sometimes all you need is 1 Euro – just over what you would spend at a dollar store. This might seem like a fairy tale offer, but real-life 1 euro deals¹ are available in countries like Italy as part of an initiative to address shrinking village populations. You can even qualify for tax deductions for any renovation expenses.
That's just one excellent reason for Canadians to buy property in Europe. More reasons include:
Affordable housing. Many European countries have social or affordable housing. The property market there can be a breath of fresh air if the bubbly Canadian property market isn't popping fast enough for you.
Low property taxes. Real property taxes² in Europe are pretty affordable, with countries like Luxembourg, The Czech Republic, and Switzerland having some of the lowest property taxes on the continent.
Reasonable yields. If you want to diversify your portfolio, you can benefit from rental yields as high as 5% or more.
Large expat community. There's a relatively large number of Canadian expats in Europe. The social familiarity means Europe can be a true home away from home.
Great package deal. Buying property in Europe is a great package deal that generally comes with lovely locations, historical architecture, warm and pleasant climates, good food and wine, friendly locals, and high quality of life.
5 essential steps to purchasing property in Europe
Many Canadians that set out to purchase property in Europe know next to nothing about the process, which typically involves these five essential steps.
#1. Choose your destination
There's no decisive answer to which European home-buying destination is perfect. Some might prefer Portugal for its pleasant weather, sumptuous cuisine, and high rank on the Global Peace index. Others might choose France's natural, quiet environment and seaside villas, while others fall in love with Italy's romantic scenery and alluring attractions.
Whether your dream home is in London, Dublin, Vienna, Tuscany, Berlin, Prague, Warsaw, or Stockholm, it's good to understand the risks, upsides, and restrictions, plus all the details in between. This is the perfect opportunity to flex your research muscles!
#2. Contract a local, experienced real estate agent
No matter how much research you do, you can still benefit from the insider insights of a local and knowledgeable real estate agent. The agent can help you decode the local market and compare property types, like HMOs, single-family homes, studios, and larger apartments. Once you find the right property, you can make an offer and get a sale contract.
#3. Find a reputable in-country attorney
When buying property abroad, the process is usually different from what you're used to in Canada, and various real estate procedures and regulations apply. Therefore, it's also a good idea to find a reputable local lawyer who knows the real estate market, property laws, and taxes like the back of their hand.
#4. Look for affordable foreign exchange services
If you're buying property overseas via a money transfer, you need affordable foreign exchange services that help you come out on top. Top options for sending money abroad include banks and specialist money transfer services. Since banks don't usually provide affordable FX services, your best option is a specialist money transfer service like MTFX.
#5. Get the money right before closing
Decide how you're going to finance your purchase. You can either pay upfront if you have robust savings or obtain a cross-border mortgage from banks like RBC and HSBC, which operate in both Canada and Europe. Other options include getting a mortgage in the country you wish to purchase property or using your home equity to secure a loan from a Canadian lender.
In any case, don't forget to factor in expected ongoing property costs to ensure you're making a financially savvy decision.
Top exchange rate pairs in Europe
Most European countries have adopted the Euro as the official currency, so you'll have to convert your Canadian dollars to Euros to purchase property. However, a few countries don't use the Euro, so other currency pairs also come into play.
Besides the EUR/CAD exchange rate pair, you may want to check out the SEK/CAD rate (Swedish Krona), DKK/CAD (Danish Krone), PLN/CAD (Polish złoty), CZK/CAD (Czech koruna), plus more.
Property purchases often involve six or more figure transactions, so your goal should be finding exchange rates that leave your money as close to one piece as possible.
To minimize wire fees and protect against inferior exchange rates and high transfer fees that are common practice in banking, it's better to send money using a specialist foreign exchange service like MTFX. MTFX specializes in large money transfers overseas with competitive exchange rates designed to boost your equity.
Paying online without going to the bank
Sending online payments overseas can be safe if you do it via MTFX's secure online platform. You can send your money on its way in the comfort of your home or office and expect it to arrive at its European destination within 24-48 hours. The 24/7 platform comes with industry-leading automation technologies, allowing you to make regular payments without setting foot in a bank.
Invest more in your property with MTFX exchange rates
If you're planning to send money from Canada to Europe to pay for the property purchase, taxes, brokerage fees, and other expenses, you need competitive exchange rates and low transfer fees.
With an MTFX account, you can make the most of your investment with low transfer fees and mid-market rates that are 3-5% cheaper than your bank. This cost-effective move could save you $5,000 for each $100,000 transaction.
Register your account with MTFX and start making secure payments from Canada to a European bank account today.
Buy property in Europe as a Canadian – FAQs
Are there any European limitations on foreign property purchases?
Generally, there are few restrictions on foreign ownership of property in Europe. Countries like France, Germany, Italy, Spain, and the UK roll out the red carpet by allowing non-Europeans to enjoy similar rights as nationals. That said, some countries roll out the red tape, which could mean more paperwork and territorial restrictions.
Which country has the cheapest real estate market?
You can find the lowest housing prices³ in European countries like Bulgaria, Romania, Turkey, Croatia, and Greece.
Can I buy property in Europe and get citizenship?
Owning property in Europe doesn't equate to obtaining citizenship or residency. To permanently live in a European country, you must submit a visa application via the appropriate channels.
What are some helpful tips for Canadians looking to buy property in Europe?
If you're planning to rent out or Airbnb your property, consider only countries where property rights are protected.
Don't just buy a home because it's ridiculously cheap. Usually, it's best to consider emerging markets with well-connected locations, a growing population, and plenty of job opportunities.
Be sure to read the fine print to know all the strings attached to any real estate deal.
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Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.
Please read the following update before logging in to your MTFX online account
We have updated our online dealing system to provide you with better functionality, more unique tools and an overall enhanced client experience. MTFX Online 2.0 is now available for your dealing needs. You can begin using our enhanced online portal today.
Please note that the traditional portal will be available for use until MAY 30th 2021 at which point it will be decommissioned.