There’s a silver lining to the low loonie if you happen to own a home south of the border. A few years ago, a wave of Canadians took advantage of a strong loonie and low U.S. home prices – and picked up some American real estate. Those homes are as good as a piggy bank now.
Why? If you refinance your U.S. home, you can bring those U.S. dollars back to Canada at the current exchange rate. That powerful U.S. dollar is your financial friend, and we don’t know how long it will last. You could use the money to pay off any debts in Canada – or even use the proceeds to purchase another Canadian property. The goal is to get those U.S. dollars back over the border to Canada.
By the way, selling the home triggers capital gains. Refinancing does not. Any income you generate by exchanging your dollars doesn’t count as capital gains, so you don’t pay tax when you exchange your US dollars for Canadian dollars. You also get to keep your vacation property.
Many Canadian owners of U.S. homes rent out the property when they’re not using it – giving them rental income to maintain the home and pay down the mortgage.
Most property values have rebounded well from their lows; so many owners are also taking advantage of the growth in their U.S. home equity. A U.S. bank will typically lend 60% of the appraised value of a property.
If you own a home in the U.S., let’s chat. Contact us at 1 866 452-1100. We have an excellent relationship with a U.S. lender that is licensed in Florida and California. You may be able to give your wealth-building a boost!