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Canadian Buyers’ Guide

To Our Canadian Buyers

The combination of a strong Canadian Dollar, deeply reduced U.S. home prices and bargain interest rates make this a great time to get that winter escape. The Palm Springs valley “winters” invite sunning by the pool, leisurely rounds of golf, hiking in the mountains, shopping on El Paseo, and dining in the restaurant courtyards. As we say here, “You don’t have to shovel sunshine.”
You will find lots of Canadian neighbors here as over 10% of the homes in our valley get bought by Canadians. And there are many reasons why…

  1. Lowest prices in years
  2. California’s simple purchase process
  3. No GST or HST
  4. No Realtor fees for buyers
  5. Mortgages readily available for Canadians
  6. Flexible options to set up ownership
  7. Relatively low property taxes

1. Lowest prices in years…

Historic low prices and great interest rates have created this major buying opportunity.

Resale properties are still competing with bank-owned houses that, while dwindling, are still keeping the lid on prices. Additionally, our valley doesn’t compete with California’s congested areas so it has always offered more house for the dollar.


2. California’s simple purchase process

Canadian buyers just need a passport – no U.S. Social Security number required. California’s title & escrow process eliminates the need for an attorney and the whole process is really quite simple. You don’t even have to be present at closing!


3. California’s property tax protection

California property taxes are 1% of the appraised value. The tax “base year value” is set by the purchase price. The law under Proposition 13 limits any annual increase in that value to the rate of inflation or 2% per year, whichever is less. Furthermore, it gets lowered to a new appraised value if prices drop as they did in the recent past years. The tax bill may also reflect special fees for services such as trash collection and any voter–approved assessments such as payments to retire bonds used to improve local infrastructure.



This one is easy to explain – there simply are no GST/HST or US sales taxes on real estate transactions.


5. No Realtor fees for buyers

This one is also easy to explain – there simply are no Realtor fees for buyers.


6. Mortgages are available for Canadians


All a Canadian buyer needs to do is open a U.S. bank account and submit the application for their second home or investment property. The particulars are:


– No U.S. residence required

– Second/investment homes only

– No social security number required

– No credit scoring – no credit report

– Full documentation required

– Usually minimum 25% down


7. Flexible options for structuring ownership

A cross-border tax specialist should be consulted to weigh your options between using cross-border trusts, placing title in personal names, or in corporations or LLP’s. If you generate U.S. income by renting out your property, you will need to get a TIN (a U.S. Taxpayer Identification Number) from the IRS for reporting the income.


Flying & Fun


Ranked in the TOP 10 U.S. “MOST STRESS FREE AIRPORTS” by, Palm Springs International Airport (PSP) is one of the most laid back airports in the country. Easy access, easy parking, short lines, relaxing manicured grounds and open concourses with “sailing kite” covers. PSP is served by eleven airlines including the major carriers providing direct non-stop flights to 22 major cities including Calgary, Edmonton, Toronto, Vancouver, and Winnipeg. And hundreds of other cities worldwide are conveniently served through PSP’s direct flights to the ten major airline hubs.


It seems to be just the right balance of infrastructure and population here – less than 350,000 folks spread across our 40 x 15 mile valley. It’s quite relaxed with lots of “elbow room”, no congestion, and all our little cities have that small town feel. But there’s plenty to do in La Quinta…Golf? – numerous tournament courses including PGA West and the city’s new SilverRock Resort.


Beyond golf? Plenty of choices – parks, fitness center, tennis, hot air ballooning, live theatre, polo matches, nearby casinos, desert walks and numerous hiking trails into the Santa Rosa and San Jacinto Mountains.


Dining? Shopping? Choices abound from the restaurants and quaint shops in La Quinta’s Old Town to the amazing array of choices throughout the town and especially along our major shopping “main street”, Hwy. 111. And all of that, without even beginning to sample the many other attractions of…


…the Palm Springs Valley – Casinos, Museums, Hot Air Ballooning, Air Shows, Car Shows, Art Shows, Dog Shows, Horse Shows, Polo Matches, Horseback Riding, Indian Wells Tennis Garden, the McCallum Theatre, Concerts, Joshua Tree National Park, Big Horn sheep, Lake Cahuilla Park, State Fair Grounds, Date Farms, Fish Farms, Farmers Market, El Paseo and Palm Springs shopping, Antiquing, Estate Sales, Water Park, Living Desert Zoo & Arboretum, Mountain Tram, Mountain Biking, Hiking, Rock Climbing and more.


And within a couple of hours, you can be sunning on the southern California beaches or skiing in the San Bernadino Mountains. Even closer, true winter and snow is just one hour away at the mile-high quaint mountain village of Idyllwild. More? Los Angeles – two hours away, San Diego and Mexico – three hours, Los Vegas – 5 hours.




If you’re here for just the season, no problem – you’re well under the six months or 182 days that are allowed by the U.S. or by your provincial health care policy. See the “Substantial Presence” test on the IRS site at


But if you do meet the requirements for a “substantial presence”, you are considered a U.S. resident…and taxed as such! However, you may qualify for a “closer connection exemption” (see If it establishes that you have a closer connection to Canada than America, you aren’t taxed by the IRS.


And our attorney says we have to say, “This advice is not a legal or tax opinion and should be confirmed with a legal/tax professional”.


Home Owners Associations


Gated, and some non-gated, communities, are governed by an HOA (similar to Strata Associations). HOA dues vary between communities depending on the services provided to the owners. From lows around $100/month to highs of $700 or more, they typically include maintenance of roads, entries, communal areas and, often, front yards. Other common services include community amenities such as pools, spas, clubhouses, fitness centers, tennis courts, basic cable TV, etc. So, to compare monthly HOA dues, check on what is covered.

Early in the purchase process, the escrow company will send the buyer a copy of the HOA CC&R’s (declaration of Covenants, Conditions and Restrictions), Rules and Regulations and the HOA’s financials for review.


Home Insurance


The coverage you need is affected by your usage of the home – part-time snowbird, short-term rental, seasonal rental, long-term lease…or even “vacant”. If you use the home solely for yourself, policies are the same as you are used to and your agent can explain the options.


However, if you will be renting out your home, there are additional considerations. Most insurers offer Property and Liability Insurance policies specifically designed for rental homes, including short-term rentals. Note that insurance companies typically consider anything less than 6 consecutive months to be a “short term rental”. So, even a 3 or 4 month seasonal lease is considered to be a “short term rental”. This is a factor they consider in your coverage so the agent needs to know or it could be a problem if you ever have a claim.


If the home is vacant for over 30 days, it is usually considered “vacant” by insurers and, therefore, the insurance rates are higher. However, there are property-watch firms in the valley that will check your home every month it is vacant for around $30 to confirm everything is OK. Most insurance companies will accept this but make sure to keep the monthly property-check reports in case you ever have to file a claim.


Rental Management


If you are going to be a landlord, there are a few considerations you need to be aware of.

  • HOA Rental Rules – Many HOA’s have restrictions on rentals. Typically, these are requirements of a minimum rental period and/or maximum occupancies. These rules will be found in the HOA rules and regulations. Some cities also have requirements plus California requires owners to collect a “Transient Occupancy Tax” of around 10% for rentals of less than 31 days.
  • Rental Management – You can solve the challenge of obtaining renters by contracting a real estate agent who specializes in rentals. They provide marketing, screening, qualifying, negotiating, and contracting renters. They also manage move-ins and move-outs in addition to collecting renter’s initial payments including reservation deposits, security deposits, and first and last months rents. These are retained in a trust account and then are forwarded to you when the tenant moves in.
  • Taxes and deductions on rental income can be handled in different ways that should be discussed with your tax specialist
  • Property Management – The more experienced agents will also offer property management services to shield you from all the associated effort and problems associated with renting your home. This service includes managing maid service, maintenance and repairs along with providing property-watch inspections, rent collection and accounting.