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Consider this

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Before buying your place in the sun, here are some things to consider. The source article was published in the Globe and Mail on January 31, 2014.

  1. Start with a search of the Internet to narrow down your place in the sun. Canadians’ favourite places are Florida, Arizona, California, Hawaii and Texas. The website, 55places.com, reviews active adult communities in the USA. Then use some vacation time to check out properties in person.
  2. How are you going to pay for it? While US mortgages can be difficult for Canadians to get, consider dealing with a Canadian bank that also has presence the USA. We like the flexibility we get with the Royal Bank of Canada’s http://www.rbcbank.com.
  3. What about ownership issues like US estate taxes? The current exemption for Canadians is $5.34 million ($10.68 million for a married couple), so unless you net worth more than that this is not an issue.
  4. Make sure you have the appropriate insurance. In addition to health, you will also want house and liability insurance.
  5. Be aware of both tax and residency implications. The IRS can come looking for tax dollars if you stay more than four months per year in a three year period. There is paper work that you can fill out to demonstrate your substantial presence in Canada rather than the USA. That will let you stay up to 182 days per year without getting taxed in the USA. Then there are the residency requirements. Canadians are currently limited to 180 days in a rolling 12 month period. The immigration reform bill currently before congress would allow Canadians to stay up to 240 days in that same 12 month period. However, if passed this will not mitigate IRS tax as well as Canadian health care issues. Provinces do limit the number of days you can be out of the province and still maintain your health care. In British Columbia you cannot be away more than seven months in a 12 month period.

Buying a place in the sunny south is not for every Canadian. However, if you are willing to do the research yourself or hire an advisor, it can be the best time of your life.