For many Canadians, the appeal of owning US real estate goes beyond investment—it’s about lifestyle. Sandy beaches, crisp golf greens, and vibrant communities all play a role. Whether it’s wintering in Florida, retiring in Arizona, or escaping to the Carolinas, Canadians have long found joy in their second homes south of the border.
But in 2025, owning US real estate as a Canadian comes with new complexities. Rising costs, tax uncertainty, and political shifts have made the decision more nuanced than ever.
Why Canadians Buy US Real Estate
For most Canadian investors, buying property in the US is less about speculation and more about supporting a desired lifestyle. These homes are often used seasonally: to escape cold winters, enjoy family time, or secure a future retirement location.
Still, there are benefits beyond personal enjoyment. Historically, Canadian investing in US real estate has resulted in long-term capital appreciation and currency gains, especially for those who purchased properties in the wake of the 2007–09 financial crisis when the US housing market bottomed and the Canadian dollar was near parity.
A Look Back: Strong Returns for Early Canadian Investors
Many Canadians who bought US real estate during or after the financial crisis have seen significant returns. Depressed home prices, combined with a strong loonie, allowed buyers to enter the market at a low cost.
Over the past years, those properties have appreciated meaningfully. Add in the 30%+ appreciation of the US dollar against the Canadian dollar, and the result has been a strong return on investment. For many, it was a winning combination of timing, market recovery, and favorable currency exchange.
The New Landscape: Challenges Facing Canadian Owners in the US
The post-pandemic environment has presented a different picture. Inflation has driven up home insurance premiums, maintenance and repair costs, and personal health insurance costs that hit Canadians harder due to currency depreciation.
Natural disasters like Hurricane Ian in 2022 created significant damage to homes, requiring additional investments and in some cases, displacing seasonal residents.
Higher interest rates have further weighed on the real estate market, both reducing home values and making financing more expensive.
What’s Next? Emerging Risks for Canadian Property Owners
Canadians owning US real estate must now navigate a more uncertain political and tax environment. A more confrontational stance from the new US administration toward Canada has unsettled some Canadians who previously felt welcomed.
One major development is Section 899 of the IRS Code—a legislative proposal that could increase capital gains taxes for residents of countries, like Canada, that are perceived to unfairly tax US businesses. While not yet enacted, it signals a potential policy shift that Canadians should monitor closely.
If passed, these rules could significantly affect Canadians with high-value US properties and large unrealized gains.
Lifestyle or Investment? Re-Evaluating Your US Property
Despite these headwinds, for many Canadians, their US home remains a lifestyle asset first. The rising costs, increased taxes, and market fluctuations are secondary to the emotional and practical benefits of having a warm-weather escape.
However, if your circumstances have changed either financially, personally, or emotionally, it may be time to revisit your goals and assess whether continuing to hold the property aligns with your overall financial plan.
Tax Considerations for Canadians with US Property
Tax planning is a critical part of owning US real estate as a Canadian. FIRPTA (the Foreign Investment in Real Property Tax Act) may require withholding of taxes when selling US property. The capital gains realized on a sale can be substantial, especially if the property is not a primary residence.
Further, estate tax issues, the potential for double taxation, and compliance with both CRA and IRS rules mean cross-border tax expertise is essential.
Investing in US real estate as a Canadian requires more than understanding property values and interest rates. It demands an integrated strategy.
Key Questions to Ask Your Advisors About Owning Real Estate in the US
- Should I keep or sell my US property based on my current financial and lifestyle goals?
- What are the implications if I pass away while still owning the property?
- How can I reduce my tax exposure on eventual sale or transfer?
- Would restructuring ownership through a trust or other entity be beneficial?
An integrated advisor with experience navigating the complexities of cross-border properties can help you navigate these issues.
Final Thoughts: Making an Informed Decision in 2025
Owning US real estate as a Canadian in 2025 looks different than it did a decade ago. While lifestyle benefits still make it attractive, the financial, tax, and political landscape is evolving.
If you’re thinking about investing in US real estate as a Canadian or already own a property, now is the time to evaluate whether it continues to support your broader goals.
At Kerr Financial, we help Canadians make informed, values-aligned decisions about real estate ownership on both sides of the border. If you’re ready to review your options, connect with one of our advisors today.
