Yes, a Canadian citizen or permanent resident living abroad can get a mortgage in Canada, even without filing a Canadian tax return. A purchase or a refinance can be financed at 65% to 80% of the property’s value, which means 20% to 35% as a down payment or equity.
That’s the short answer. The long answer deserves a closer look, because it’s rarely what you’ll hear at a bank counter.
As a general rule, the banks do not lend to non-tax residents. They will take your application, but the file very often stalls along the way, and in the end the financing is never approved, or never funded.
It’s one of the most frustrating situations there is. You hold Canadian citizenship or permanent resident status, all properly documented. You want to buy or refinance a property in Canada. And yet every financial institution comes back with the same negative answer. The reason? You are a non-tax resident. You don’t file a tax return in Canada and your income comes from abroad.
What nobody tells you is that solutions exist. They require a well-prepared file and specialized guidance, but they exist. This article covers the whole question: definitions, numbers, documents to prepare, pitfalls to avoid, and answers to the questions we hear most often.
Non-tax resident: what does that actually mean?
The confusion usually comes from mixing up two very distinct concepts in Canadian law.
On one side, there is immigration status: are you a Canadian citizen or a permanent resident under the Immigration and Refugee Protection Act? That’s a matter of documents and rights, a passport or a permanent resident card, sometimes even a valid work permit.
On the other side, there is tax residency: are you considered a resident of Canada for income tax purposes? This concept doesn’t depend on your passport, but on where you ordinarily live and on your residential ties to Canada: a home available to you, a spouse or dependants in the country, economic and personal attachments. The Canada Revenue Agency looks at each situation as a whole. So you can absolutely be a Canadian citizen and a non-tax resident at the same time. That’s the case for many Canadians who have been working and living abroad for several years, whether in Dubai, Paris, Singapore or the United States.
It’s exactly this profile, a citizen or permanent resident under immigration law but a non-tax resident, that traditional banks treat as an unsolvable case. And it’s exactly this profile for which mortgage solutions exist.
No, you are not a “foreign buyer” under the law
Another frequent source of worry: the Prohibition on the Purchase of Residential Property by Non-Canadians Act, in force until January 1, 2027. Many expats assume it applies to them. It doesn’t. The Act defines “non-Canadian” by immigration status, not by tax residency. A Canadian citizen or permanent resident can buy residential property anywhere in the country, even while living abroad and paying no tax here.
The same logic applies to the Underused Housing Tax: citizens and permanent residents are, in the vast majority of cases, exempt as excluded owners. And unlike Ontario or British Columbia, Quebec imposes no special tax on buyers coming from abroad. So your obstacle isn’t legal. It’s a banking one. An important distinction.
What’s possible: purchase and refinancing in plain numbers
Contrary to what a bank refusal suggests, the Canadian mortgage market offers real options for non-tax residents who hold citizen or permanent resident status.
For a purchase: 65% to 80% of the property’s value
It is possible to finance up to 80% of the purchase price of a property in Canada, which means a minimum down payment of 20%, or 35% depending on the situation.
Why 20% or 35% and not less? Because mortgage default insurance (CMHC, Sagen or Canada Guaranty), which lets residents buy with as little as 5% down, is not available to non-tax residents. With insurance off the table, the conventional loan at 80% becomes the ceiling.
This down payment must be traceable and clearly documented over a minimum of 90 days, whatever its source: savings held abroad, the sale of a property, a family gift. Funds that move between several accounts or several countries must be traceable every step of the way, with bank statements to back them up. This is a compliance requirement no lender will waive.
For a refinance: 65% to 80% of your property’s value
If you already own a property in Canada and want to refinance to pay for renovations, buy out an ex-spouse’s share, consolidate debts or free up cash, the available financing generally sits between 65% and 80% of your property’s market value, depending on the strength of the file and the lender chosen. A well-kept rental building in Montreal with a tenant in place and solid foreign income will not be treated the same way as a cottage occupied two weeks a year. Every file has its own logic.
Proof of foreign income: the cornerstone of the file
This is where everything is decided. A non-tax resident doesn’t file a Canadian tax return and has no notice of assessment from the Canada Revenue Agency. The tools normally used to assess a borrower’s ability to repay simply don’t apply.
But the absence of Canadian documents doesn’t mean the absence of income. It means that income has to be documented differently, and rigorously. Lenders who accept this type of file require complete, consistent documentation that may include:
- tax returns from your country of residence (the foreign equivalents of the T1);
- employment contracts or formal letters of employment, translated where necessary;
- recent pay stubs or proof of salary deposits;
- foreign bank statements covering 6 to 12 months, showing regular incoming funds;
- your credit report from the country where you live.
Credit reports by country
Most countries have a credit bureau that can issue a report in your name. A few examples:
- Switzerland: ZEK (loans, leasing, credit cards) and CRIF (zek.ch · crif.ch)
- Dubai / UAE: Al Etihad Credit Bureau, AECB (etihadbureau.ae)
- Belgium: Central Individual Credit Register, CICR (nbb.be)
- Germany: SCHUFA
- United States: Equifax, Experian, TransUnion
- Mexico:Buró de Crédito and Círculo de Crédito
- Colombia: Datacrédito Experian and TransUnion (ex-CIFIN)
- Singapore:Credit Bureau Singapore (CBS)
- Hong Kong:TransUnion HK (via le modèle « Credit Data Smart »)
Special cases: France and Luxembourg
France (like Luxembourg) has no positive credit bureau: the Banque de France only keeps incident files (FICP, FCC), so a borrower in good standing has no report to produce. The workaround is a bank reference letter covering the elements it must contain: length of the banking relationship, accounts held, absence of incidents, loans repaid without late payments, signature and stamp, dated within the last 30 days.
French template: an “À qui de droit” letter, requested from your banker or branch in your bank’s usual format, on the bank’s letterhead, with the bank’s signature and/or stamp.
English template: a “To whom it may concern” letter, the equivalent version, requested the same way: your bank’s usual format, on letterhead, signed and/or stamped by the bank.
Two useful notes. First, income in foreign currencies (euros, US dollars, Swiss francs, dirhams) is converted into Canadian dollars for the calculation, and some lenders apply a prudential haircut to account for currency risk. Second, the quality of this documentation is non-negotiable: an incomplete file will be declined, even if the underlying income is solid. A well-built file, on the other hand, can go a long way.
Debt service ratios: the calculation that makes the difference
Once the income is established, the lender calculates the debt service ratios: GDS (gross debt service) and TDS (total debt service). These ratios compare your housing costs, then all of your financial obligations, against your gross income. On top of that comes the qualifying rate, often higher than the rate you actually pay, used to check your ability to absorb a rate increase.
For a non-tax resident, this calculation can quickly be affected by a common situation: owning a rental property abroad.
Own a rental property outside Canada? Here’s the rule nobody explains
Many Canadian expats own real estate in their country of residence or elsewhere in the world, and some earn rental income from it. This has a direct impact on how their Canadian mortgage file is built, and not in the direction you might expect.
What doesn’t count: rental income generated by a property located outside Canada cannot be included in your qualifying income. No Canadian lender will recognize it as such, no matter how regular or substantial it is.
What does count: every financial obligation tied to that foreign property is fully included in your expenses, down to the last dollar. That includes:
- 100% of the monthly mortgage payment on that property;
- condo fees or building management charges;
- property taxes or their local equivalent;
- any other documented recurring expense tied to that property.
The result: your foreign rental income does nothing to improve your ratio, while your foreign expenses weigh it down. This asymmetry is the number one reason a debt service ratio blows past acceptable thresholds despite a comfortable employment income. Which is exactly why this type of file calls for a rigorous upfront analysis and a presentation strategy planned in advance, not a ten-minute online pre-approval form.
Why the bank says no, and what that really means
A refusal from a major Canadian bank does not mean your file is hopeless. It means your file doesn’t match the type of financing that bank offers. Many banks turn these profiles away simply because they have neither the product nor the process to analyze them.
But the Canadian mortgage market is not limited to the six big banks. It includes prime lenders who specialize in non-standard profiles, alternative deposit-taking institutions, credit unions and private lenders. Each one has its own criteria, its own risk tolerance and its own products.
This is where expertise makes all the difference. Vincent Le Saux and Thibaut Coquel, mortgage brokers at Hypotheques.ca, handle this type of file on a regular basis. They know the exceptions and possibilities specific to each lender: which one accepts income in US dollars, euros or Swiss francs, which one is satisfied with two years of foreign tax returns instead of demanding three, which one is used to analyzing a file that includes a rental property in Morocco, in France or elsewhere. That targeting work, knowing which lender to approach with which file and how to document it, is what separates a systematic refusal from an approval.
How a file actually unfolds
To take the drama out of the process, here are the main steps of a financing file for a non-tax resident:
- Preliminary analysis of your situation: status, income, assets, project, properties owned here and abroad.
- Assembling the proof of income and down payment, with translations where needed. Documents must be PDFs showing your name; screenshots are not accepted.
- Targeting the lender or lenders whose criteria match your profile, then submitting the file.
- Approval, conditions to satisfy, property appraisal.
- Signing with the notary. Good news: your physical presence in Canada is not always required. A power of attorney or certain remote signing arrangements can be considered with the acting notary.
Also plan on opening or keeping a Canadian bank account: mortgage payments are withdrawn from an account in Canada, in Canadian dollars. And allow a little more time than a standard file, enough to gather and validate the foreign documentation. A project planned two or three months ahead goes much more smoothly than one thrown together under the pressure of a signed purchase offer.
Key takeaways
- Being a Canadian citizen, a permanent resident or, in some cases, a temporary resident with a valid work permit is one thing; being a non-tax resident is another. The two statuses can coexist.
- The federal ban on purchases by non-Canadians does not apply to citizens or permanent residents, even non-tax residents.
- Financing of up to 80% is possible for a property purchase in Canada, with a down payment of 20% to 35% documented over 90 days.
- A refinance at 65% to 80% of your Canadian property’s value is available, depending on the strength of the file.
- Proof of foreign income must be complete, consistent and verifiable: it is the cornerstone of the file.
- If you own a rental property outside Canada, its income never counts toward your qualifying income, but its expenses count in full toward your obligations.
- A bank refusal is not a final answer. It’s the start of a real process, with the right person at your side.
Frequently asked questions
Can a Canadian citizen living abroad get a mortgage in Canada?
Yes. A Canadian citizen or permanent resident who is a non-tax resident can finance up to 80% of the purchase price of a property in Canada, provided their foreign income and down payment are rigorously documented. Several Canadian lenders accept this type of file, even though most of the big banks decline it.
What is the minimum down payment for a non-tax resident?
20% of the purchase price, and up to 35% depending on the situation. Mortgage default insurance (CMHC and the private insurers), which would allow a smaller down payment, is not offered to non-tax residents. The down payment must be traceable and documented over at least 90 days.
Is my income in euros, US dollars or Swiss francs accepted?
Yes, depending on the lender. Foreign income is converted into Canadian dollars for the ratio calculations, and some lenders apply a haircut to account for currency risk. The choice of lender depends partly on the currency and the country your income comes from.
Does the rental income from my property abroad count in my file?
No. Rental income from a property located outside Canada is not eligible for your income calculation. On the other hand, all the expenses of that property (mortgage, taxes, condo fees) are counted at 100% in your obligations. This asymmetry needs to be anticipated from the moment the file is built.
Am I affected by the ban on purchases by non-Canadians?
No. The Prohibition on the Purchase of Residential Property by Non-Canadians Act, in force until January 1, 2027, defines a non-Canadian by immigration status. Canadian citizens and permanent residents can buy freely, even as non-tax residents.
Are interest rates higher for a non-tax resident?
Not necessarily. Some prime lenders offer terms comparable to what a resident would get; others apply a risk premium. It all depends on the strength of the file and the lender targeted. That is precisely the broker’s job: comparing the options and negotiating, on the rate as well as on the loan conditions.
Do I have to be in Canada to sign?
Not always. Depending on the notary and the lender, a power of attorney or certain remote signing arrangements can be put in place. This is a point to confirm early in the process to avoid a last-minute round trip.
How much time should I allow for a non-tax resident file?
More than a standard file, generally 15 to 20 days, mainly to gather and validate the foreign documentation (translations included). Ideally, start the process one to two months before your project, and before signing a purchase offer.
Living abroad with a real estate project in Canada?
Before letting a refusal discourage you or putting your project off indefinitely, talk it through. An analysis of your file often uncovers a path where you were told there was none.
→ Book an appointment with Vincent Le Saux, mortgage broker, at Hypotheques.ca
Note: the financing conditions mentioned in this article are indicative and subject to the lender’s full analysis of the file. Tax residency is a complex legal concept that depends on each individual’s personal situation. Consult a licensed mortgage broker and, where appropriate, a tax specialist for a personalized assessment.
