Yes, a Canadian citizen can buy a house in the USA. There is no federal law restricting foreign nationals from purchasing residential real estate, no special permit to apply for, and no government approval required. Canada has historically been one of the largest foreign holders of U.S. land. The catch is not the purchase itself. It’s what happens around it: your immigration status doesn’t change, your time at the property is capped, and U.S. tax rules treat you differently than a domestic owner at every stage of ownership.
Owning a Home Doesn’t Let You Live There
Buying property gives you no immigration rights. Real estate ownership and immigration status are entirely separate, and no amount of investment in a personal residence creates a path to a green card. The EB-5 investor visa requires investing in a job-creating commercial enterprise, not a home.1U.S. Citizenship and Immigration Services. Green Card for Immigrant Investors
Canadians have an easier time entering the U.S. than most foreign nationals. Under federal regulations, Canadian citizens are generally exempt from the visa requirement and can be admitted as visitors for up to six months.2eCFR. 8 CFR 212.1 – Documentary Requirements for Nonimmigrants You’ll need a valid passport or another accepted travel document, such as a NEXUS card or enhanced driver’s license, depending on how you’re crossing.3U.S. Customs and Border Protection. Documents Required for Canadian Citizens / Residents / Landed Immigrants
Six months is a firm ceiling. If you stay unlawfully for more than 180 continuous days but less than a year and then leave, you face a three-year bar from re-entering. Stay a year or more, and the bar extends to ten years. Owning property is not grounds to extend an authorized stay.
Financing as a Canadian Buyer
Getting a mortgage is possible but noticeably harder than it is for U.S. citizens. Lenders view foreign nationals as higher-risk borrowers because they can’t easily verify Canadian credit history and have limited recourse if you default and return home. Expect a down payment of 20% to 40% of the purchase price, versus the 3% to 20% range that domestic buyers typically face.
Cross-border specialist banks and mortgage brokers are usually the best route. They know how to read Canadian income documents and credit bureau reports from Equifax Canada or TransUnion Canada. A handful of large banks operate on both sides of the border and can streamline the paperwork, though their rates still tend to run above what a comparable U.S. borrower would get.
Many Canadian buyers pay cash. If you do, plan the currency exchange carefully. Moving a large sum through a standard bank wire can cost significantly more than using a specialist foreign-exchange service, because banks typically mark up the exchange rate on top of their wire fees. On a $500,000 home, even a small unfavorable spread adds thousands of dollars. A forward contract can lock in a rate between your offer and closing.
How the Purchase Itself Works
The mechanics are mostly the same as they are for domestic buyers. Start with a real estate agent who has worked with international buyers. An experienced agent will know which lenders accept foreign borrowers, understand the extra documentation, and won’t be surprised when a title company asks about your tax status at closing.
Once your offer is accepted, a neutral third party handles the transaction. In most states, that’s either an escrow company or a real estate attorney who holds your deposit and coordinates the closing. You’ll usually order a home inspection, finalize financing, and buy title insurance, which protects you against problems in the property’s ownership history that could threaten your claim later.
Buyer closing costs generally run between 1% and 5% of the purchase price, covering lender fees, title insurance, recording fees, and prepaid property taxes. At closing, you sign the final documents, funds transfer, and the deed is recorded in your name. From that point on, you have the same property rights as any U.S. citizen.
The Day-Count Tax Trap
This is where snowbirds and vacation-home owners most often get caught. Even if you never intend to become a U.S. resident, spending too many days at your property can make you one for tax purposes. The IRS uses the substantial presence test, which counts your days in the U.S. over a rolling three-year window.4Internal Revenue Service. Substantial Presence Test
You meet the test and become a U.S. tax resident if you were physically present at least 31 days in the current year and your weighted three-year total reaches 183. The formula counts all days in the current year, one-third of last year’s days, and one-sixth of the days from two years back.4Internal Revenue Service. Substantial Presence Test If you spend 150 days a year in the U.S. for three consecutive years, your weighted total is 150 + 50 + 25 = 225 days, well over the line. That would make you a U.S. tax resident required to report worldwide income to the IRS.
The fix is IRS Form 8840, the Closer Connection Exception Statement. It lets you show your primary ties remain in Canada, so you’re treated as a nonresident even though the day count crossed 183. To qualify, you must have been present in the U.S. fewer than 183 days in the current year alone, kept a tax home in Canada for the full year, and not applied for a green card.5Internal Revenue Service. Closer Connection Exception to the Substantial Presence Test The IRS looks at where your permanent home, family, personal belongings, bank accounts, driver’s license, and social ties are located.
Skipping Form 8840 when your day count triggers the test is an expensive mistake. The IRS can then treat you as a U.S. tax resident by default, meaning tax on Canadian income too and additional reporting, such as declaring Canadian bank accounts to the Financial Crimes Enforcement Network if their combined value exceeds $10,000 at any point during the year.
If You Rent the Property Out
Before you touch any U.S. tax obligation, you’ll need an Individual Taxpayer Identification Number. An ITIN is issued to people who must file a U.S. return but can’t get a Social Security Number.6Internal Revenue Service. U.S. Taxpayer Identification Number Requirement Apply on Form W-7 by mail or through an IRS-authorized Certifying Acceptance Agent. If you’re buying or selling, you can attach your withholding tax forms to the W-7 and mail everything together.7Internal Revenue Service. ITIN Guidance for Foreign Property Buyers/Sellers Processing typically takes seven weeks, and nine to eleven during tax season or when applying from outside the U.S.8Internal Revenue Service. How to Apply for an ITIN
The default rental rule is harsh: the IRS withholds 30% of gross rent with no deductions allowed.9Internal Revenue Service. Nonresident Aliens – Real Property Located in the U.S. On $3,000 a month in rent, $900 goes to the IRS before you touch mortgage, taxes, maintenance, or management fees.
Almost every Canadian owner is better off making the election under IRC Section 871(d). That election treats your rental as income connected with a U.S. business, so you pay tax on net income after deductions.9Internal Revenue Service. Nonresident Aliens – Real Property Located in the U.S. You can then deduct property taxes, insurance, repairs, management fees, depreciation, and other rental-related expenses, and pay tax on the profit at graduated rates. You make the election by attaching a statement to Form 1040-NR, and it applies to all your U.S. rentals going forward. In the early years, especially with depreciation factored in, this often leaves little or no U.S. tax owed.
Selling: FIRPTA Withholding
Selling U.S. real estate as a foreign person triggers the Foreign Investment in Real Property Tax Act. Under FIRPTA, the buyer must withhold a percentage of the sale price and send it to the IRS as a prepayment against any capital gains tax you owe.10Internal Revenue Service. FIRPTA Withholding It’s not an extra tax. It’s money held to make sure you file and pay. You reclaim any excess by filing a return, but a large amount of your proceeds is tied up in the meantime.
The withholding rate depends on the sale price and the buyer’s intended use:
- Sale price of $300,000 or less with the buyer using it as their personal residence: no withholding.11Office of the Law Revision Counsel. 26 U.S. Code 1445 – Withholding of Tax on Dispositions of United States Real Property Interests
- Sale price above $300,000 up to $1,000,000 with the buyer using it as a residence: 10% withholding.11Office of the Law Revision Counsel. 26 U.S. Code 1445 – Withholding of Tax on Dispositions of United States Real Property Interests
- All other sales, including investment properties and any home selling for more than $1,000,000: 15%.10Internal Revenue Service. FIRPTA Withholding
On a $700,000 vacation home sold to an investor, the withholding at 15% is $105,000. That amount sits with the IRS until you file a return showing your actual gain.
You can reduce or eliminate the withholding in advance by applying for a withholding certificate on Form 8288-B. This is worth doing when your actual liability will be well below the withheld amount, which is common when you’ve owned the property for years and your basis is close to the sale price. The IRS typically acts on complete applications within 90 days.12Internal Revenue Service. Instructions for Form 8288 Start the application well before your closing date.
Estate Tax: A $60,000 Threshold
U.S. estate tax is where the math turns alarming without planning. A U.S. citizen’s estate can pass along millions before federal estate tax begins. For a nonresident who isn’t a U.S. citizen, the filing threshold is just $60,000 in U.S.-situated assets.13Internal Revenue Service. Estate Tax for Nonresidents Not Citizens of the United States The threshold is not adjusted for inflation, and it covers the total value of your U.S. assets: real estate, U.S. bank accounts, and U.S. stocks. Any vacation home worth more than $60,000 crosses the line.
Rates on taxable amounts above the threshold start at 26% and climb to 40%. Without treaty relief, a Canadian dying with a $500,000 Florida condo could leave heirs a six-figure estate tax bill.
The U.S.-Canada tax treaty helps considerably. Under the treaty’s coordination provision, your estate can claim a prorated version of the much larger unified credit U.S. citizens receive.14Office of the Law Revision Counsel. 26 USC 2102 – Credits Against Tax The formula takes the ratio of your U.S. assets to your worldwide estate and applies it to the full U.S. citizen credit. If your U.S. property is a small percentage of your total assets, the prorated credit can shelter the whole property. Claiming it requires your executor to file the right forms, so cross-border estate planning while you’re alive is the way to make sure the benefit isn’t missed.
Avoiding Double Taxation with Canada
Canada taxes its residents on worldwide income, so you’ll owe Canadian tax on the same rental income and capital gains the U.S. already taxed. The U.S.-Canada tax treaty prevents true double taxation through a foreign tax credit. The U.S. is allowed to tax income from real property within its borders, and Canada gives you a credit for the U.S. tax paid. The same mechanism applies when you sell: the U.S. taxes the capital gain under FIRPTA, and Canada credits the U.S. tax against the Canadian tax on the same profit.15Internal Revenue Service. United States-Canada Income Tax Convention The credit typically offsets most or all of the Canadian tax, though mechanics get complicated when rates differ or the two countries calculate the gain differently. A cross-border tax accountant is close to a necessity if you own U.S. rental property.
State Restrictions on Foreign Ownership
There is no federal ban, but a growing number of states have passed laws restricting who can buy land within their borders. Between 2023 and 2024, at least 22 states enacted some form of legislation regulating foreign ownership of real property. Most of these target agricultural and rural land, particularly near military installations, and many focus on citizens of specific countries rather than all foreign nationals. Canadian buyers of a typical home or condo are unlikely to be affected, but if you’re looking at large rural parcels or property near a military base, check the state’s rules before making an offer.
Insurance and Ongoing Costs
Homeowners insurance shifts when you use the property seasonally. A home that sits empty for months usually doesn’t qualify for a standard policy. Insurers typically classify it as unoccupied and either require an endorsement or a separate policy, generally 15% to 30% higher than a standard premium. Many require utilities running, a minimum interior temperature in winter, and regular property inspections while you’re away. Missing those conditions can void your coverage, particularly for water damage from frozen pipes.
Property taxes vary widely across the U.S., with effective rates ranging from under 0.3% to over 2% of assessed value depending on state and county. Some jurisdictions also impose special assessments for things like flood control or community improvements. Research the full tax picture for the specific area, because annual carrying costs can differ by thousands of dollars for comparable homes in different locations.