Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyer Ban)
Beginning January 1, 2023, non-Canadians will be banned from buying residential property across Canada for two years. Although the federal government has still not released supporting regulations at this point, the Canadian Real Estate Association and BCREA will notify REALTORS® as soon as any guidance is released.
Canada has amended the regulations of the Prohibition on the Purchase of Residential Property by Non-Canadians Act to enable work permit holders to purchase homes and exempt vacant land from the foreign buyer ban. The amendments also include an exception for non-Canadians to buy residential property for the purpose of development and increase the corporation foreign control threshold to 10% from 3%. The amendments were made in response to concerns raised by the real estate industry that the foreign buyer ban was negatively affecting real estate investment trusts and developers relying on foreign capital to finance purpose-built developments.
Home Buyer Rescission Period
The HBRP is coming into force on January 3, 2023. This provincial policy gives buyers the right to withdraw from a purchase agreement within three business days of an offer being accepted.
BCREA has created two HBRP calculators to support REALTORS® when calculating the rescission amount and time period during which a buyer may exercise their right of rescission. To access the calculators, click here.
To enhance your understanding of the new legislation and its practical implications, we encourage REALTORS® to take BCREA’s course The Home Buyer Rescission Period: What REALTORS® Need To Know.
Federal Housing Tax Changes
Multigenerational Home Renovation Tax Credit – On January 1, 2023, the Multigenerational Home Renovation tax credit will come into effect. This tax credit will cover eligible homeowners up to 15 per cent (to a maximum of $7,500) for creating a secondary unit in their home to accommodate a senior or adult with a disability.
Residential Property Flipping Rule – Beginning January 1, 2023, individuals who sell their residence within 12 months of acquiring it will be taxed as business income and be ineligible for either the 50 per cent capital gains rate or the principal residence exemption. There are exemptions for “life events” such as a divorce or death.
Contact us to learn more about how these policy changes will affect you!