Buying real estate in the US as a Canadian involves cross-border financing, currency considerations, and dual-country tax obligations. Here is a complete guide.
Financing options for Canadians
| Option | Down Payment | Rate | Complexity | Best For |
|---|---|---|---|---|
| Cross-border bank (RBC, TD) | 20%–30% | US market rates (~6%–7.5%) | Moderate | Canadians wanting a familiar bank |
| US foreign national loan | 25%–30% | 6.5%–8.5% | High | No Canadian bank relationship |
| HELOC on Canadian property | N/A (borrow equity) | Canadian HELOC rate (6%–7%) | Low | Property paid for in cash using HELOC |
| Canadian lender (US property) | 25%–35% | Varies | Moderate | Select credit unions / trust companies |
| Private / hard money | 30%–40% | 9%–14% | Low | Fast close, credit challenges |
| All cash | 100% | N/A | Lowest | Simplest; most competitive offer |
Cross-border mortgage programs
RBC Bank (Georgia, N.A.)
| Feature | Details |
|---|---|
| Who | RBC’s US subsidiary — serves Canadians buying in the US |
| Down payment | 20%–25% |
| Credit | Uses Canadian credit history |
| States available | Most US states (focus on Florida, Arizona, California, Hawaii) |
| Currency | Mortgage in USD |
| Advantage | Familiar institution; uses Canadian income documentation |
TD Bank (US)
| Feature | Details |
|---|---|
| Who | TD operates in the eastern US (Maine to Florida) |
| Down payment | 20%–30% |
| Credit | Can use Canadian credit history for TD clients |
| States available | East coast — FL, NY, NJ, CT, MA, PA, NC, SC, VA, etc. |
| Currency | Mortgage in USD |
| Advantage | Existing TD clients may have streamlined process |
Qualification requirements
| Requirement | Details |
|---|---|
| Down payment | 20%–30% (foreign national) |
| ITIN | Individual Taxpayer Identification Number — needed for most US mortgage applications |
| Income documentation | Canadian Notice of Assessment, employment letter, or business financials |
| Credit | Canadian credit report accepted by cross-border lenders; US credit may be needed for domestic US lenders |
| Debt ratios | US DTI (Debt-to-Income) similar to Canadian TDS — typically max 43% |
| Reserves | Many lenders require 6–12 months of mortgage payments in liquid reserves |
| Property type | Single-family, condo, townhouse — condos must be “warrantable” (meets US lending standards) |
| US bank account | Required for mortgage payments and property expenses |
Currency considerations
| Factor | Details |
|---|---|
| Exchange rate risk | Monthly USD mortgage payments fluctuate in CAD terms |
| Current rate (2026) | ~$1.00 USD = $1.36–$1.40 CAD |
| Impact on $2,000 USD payment | ~$2,720–$2,800 CAD per month (varies with exchange rate) |
| Hedging strategies | Forward contracts, regular USD purchases, maintain US-dollar income |
| US bank account | Keep a USD buffer to smooth out exchange rate fluctuations |
| When exchange hurts | If CAD weakens, your effective mortgage cost rises |
| When exchange helps | If CAD strengthens, your effective cost drops |
Currency impact example
| CAD/USD Rate | $2,000 USD Monthly Payment in CAD | Annual Cost in CAD |
|---|---|---|
| 1.25 | $2,500 | $30,000 |
| 1.35 | $2,700 | $32,400 |
| 1.40 | $2,800 | $33,600 |
| 1.50 | $3,000 | $36,000 |
A 10% swing in the exchange rate changes your annual cost by ~$3,000 CAD.
Tax implications
US tax obligations
| Tax | Details |
|---|---|
| US income tax (rental income) | Report on US tax return (Form 1040-NR); can elect to file under Section 871(d) to deduct expenses |
| State income tax | Depends on state — Florida and Arizona have no state income tax |
| US property tax | Varies by state, county, and municipality; typically 0.5%–2.5% of assessed value |
| FIRPTA withholding on sale | 15% of gross sale price withheld at closing (refundable if tax owed is less) |
| US capital gains tax | 15%–20% federal + state (if applicable) |
| US estate tax | Applies to US-sited assets; $60,000 exemption for non-residents (Canada-US tax treaty increases this) |
Canadian tax obligations
| Tax | Details |
|---|---|
| Report US rental income | Include on your Canadian return; claim foreign tax credit for US tax paid |
| Report US property sale | Include capital gains on Canadian return; foreign tax credit for US tax paid |
| Form T1135 | Required if foreign property cost > $100,000 CAD — annual reporting |
| Principal residence exemption | US property can be designated as PR for Canadian purposes — but you lose the exemption on your Canadian home for those years |
| Foreign tax credit | The Canada-US tax treaty prevents double taxation — you claim credit for US taxes paid against your Canadian tax |
US estate tax and the Canada-US tax treaty
| Scenario | US Estate Tax Exposure |
|---|---|
| US assets < $60,000 | No US estate tax |
| US assets > $60,000 (no treaty benefit) | 18%–40% estate tax on US-sited assets above $60,000 |
| With treaty benefit | Pro-rated US estate exemption ($13.61M in 2024, adjusted for inflation) — most Canadians with worldwide estates under ~$13.6M USD pay no US estate tax |
| Cross-border trust / entity | May provide additional protection — consult a cross-border estate lawyer |
Buying process for Canadians
| Step | Details | Timeline |
|---|---|---|
| 1. Get an ITIN | Apply via IRS Form W-7 | 4–8 weeks |
| 2. Open a US bank account | RBC, TD, or a US bank that works with Canadians | 1–2 weeks |
| 3. Get pre-approved | Cross-border mortgage or US foreign national program | 2–4 weeks |
| 4. Engage a realtor | US-licensed realtor experienced with Canadian buyers | Ongoing |
| 5. Find a property | Search, tour, make an offer | Varies |
| 6. Inspection, appraisal | Home inspection, lender appraisal | 1–3 weeks |
| 7. Final mortgage approval | Provide documentation, close the loan | 3–6 weeks |
| 8. Close | Sign documents (may be done remotely via notary); funds wired in USD | 1–2 weeks |
Ongoing costs
| Cost | Florida Example | Arizona Example |
|---|---|---|
| Property tax | ~1.0%–1.5% of assessed value | ~0.6%–0.8% |
| Homeowners insurance | $2,000–$8,000+/year (hurricane risk) | $800–$2,000/year |
| HOA / condo fees | $200–$800/month (community dependent) | $100–$400/month |
| Flood insurance (if required) | $500–$3,000/year | Rarely needed |
| Property management (if rented) | 8%–12% of gross rent | 8%–12% of gross rent |
| Maintenance | 1%–2% of property value/year | 0.5%–1.5% of property value/year |
| US tax preparation | $500–$1,500/year | $500–$1,500/year |
| Canadian cross-border tax prep | $500–$1,500/year | $500–$1,500/year |
Checklist for Canadians buying in the US
- Applied for an ITIN (IRS Form W-7)
- Opened a US bank account (USD)
- Pre-approved for cross-border or foreign national mortgage (or prepared to pay cash)
- Engaged a US realtor experienced with Canadian buyers
- Retained a cross-border tax advisor (familiar with both CRA and IRS)
- Consulted a cross-border estate lawyer (US estate tax planning)
- Purchased adequate US homeowners insurance
- Set up a plan for currency exchange (regular transfers, forward contracts)
- Budgeted for FIRPTA withholding on any future sale
- Planned for Form T1135 reporting in Canada