Foreign National Loans

Not necessarily.

Before creating an LLC, trust, or other ownership structure, you should first confirm whether that structure is compatible with the mortgage program you intend to use.

Different lenders have different requirements regarding how title can be held.

Depending on the mortgage program, the lender may require the property to be owned personally, may allow ownership through an LLC or certain types of trusts, or may require the individual borrower to personally guarantee the mortgage even when an entity holds title.

The requirements can also vary depending on whether the property is being purchased as a second home, vacation property, long-term rental, short-term rental, investment property, or foreign-national purchase.

For this reason, the ownership structure should ideally be discussed with your mortgage professional, lawyer, and tax adviser before it is created.

You can, but that does not mean you should.

One of the mistakes buyers can make is choosing a structure simply because a friend, realtor, or another Canadian property owner used it.

The structure that works for one person may be inappropriate for someone else because their financing, tax situation, family circumstances, residency, and estate size may be completely different.

No.

Estate planning should also address what happens if you become unable to manage your own affairs.

Someone may need authority to pay property expenses, deal with a condominium or homeowners association, work with a property manager, manage tenants, sign contracts, refinance the property, or sell it.

A Canadian power of attorney may not always be accepted as easily by U.S. lenders, banks, title companies, and other parties as the property owner expects.

Canadians who own U.S. property should therefore discuss incapacity planning with a lawyer familiar with cross-border ownership.

For 2026, the U.S. federal estate-tax basic exclusion amount for U.S. citizens and residents is US$15 million.

Canadians are treated differently, but the Canada-U.S. Tax Treaty can provide important relief.

In simplified terms, qualifying Canadians may be able to benefit from a portion of the U.S. estate-tax credit based partly on the value of their U.S. assets compared with the value of their worldwide estate.

This is why looking only at the value of the U.S. property does not necessarily tell you whether there is an estate-tax concern.

Potentially, yes.

Canada generally treats certain assets as though they were sold at fair market value immediately before death. This is commonly known as a deemed disposition.

If your U.S. property has increased substantially in value, this can potentially create a Canadian capital gain at death, subject to available exceptions and rollover provisions.

At the same time, there may also be U.S. estate-tax considerations.

The Canada-U.S. Tax Treaty contains provisions that can help address certain situations where both countries may otherwise tax the same event.

This is one of the reasons coordinated Canadian and U.S. tax advice is particularly important for Canadians with significant U.S. assets.

Not automatically.

An LLC can be useful in certain circumstances, particularly with some investment properties, but it can also create Canadian tax and reporting issues.

Canada and the United States do not necessarily treat an LLC the same way for tax purposes.

There is also the mortgage issue.

Not every lender or mortgage program will allow the same type of LLC ownership, and some programs may not allow it at all.

Changing ownership after closing may also require lender approval or complicate an existing mortgage.

An LLC should therefore be considered as part of the overall financing, tax, and estate-planning strategy rather than treated as a default solution.

Yes.

Estate planning should address not only who receives the property but also what happens to the mortgage and the property’s ongoing expenses.

If the owner dies while there is still a significant mortgage balance, the family or estate may need to continue paying:

• Mortgage payments
• Property taxes
• Insurance
• HOA or condominium fees
• Maintenance expenses

If beneficiaries intend to keep the property, they will also need to understand how the existing mortgage will be handled.

If the property will be sold, the estate may need enough liquidity to carry the property until the sale is completed.

These practical issues can easily be overlooked when an estate plan focuses only on who inherits the property.

Ideally, before you close on the property.

For Canadians buying U.S. real estate, financing, ownership, tax planning, and estate planning should be considered together before the mortgage and purchase are finalized.

Three professionals can play important roles in that process.

Your mortgage professional can confirm whether the proposed ownership structure is acceptable to the lender and compatible with the mortgage program being used.

A cross-border estate lawyer can determine how the U.S. property should fit into your wills, powers of attorney, and overall succession plan.

A cross-border tax adviser can identify potential Canadian and U.S. tax consequences during ownership, when the property is sold, and at death.

These decisions should not be made independently.

The goal is to make sure your mortgage, ownership structure, tax planning, and estate plan all work together.

For Canadians purchasing property in the United States, addressing these questions before closing can prevent a relatively straightforward property purchase from becoming a much more complicated cross-border issue later.