Here are some critical changes in the real estate market that came into effect as of January 1 2023.

Anti-flipping tax

• Selling a property within 12 months of buying it will be considered “flipping” and profits will be taxed as business income.

• Ineligible for the principal residence exemption or the 50% capital gains rate.

• There are exemptions for “life events” such as a divorce or death.

Buyer Rescission Period

• Buyers can walk away from a purchase within three 3 business days after an offer is accepted.

• Buyer will have to pay the seller 0.25% of the purchase price. ( $2500 for every $1,000,000.)

Canada-wide ban on No Foreign Buyer purchases for 2 years

• Only Canadian citizens or permanent residents will be allowed to purchase property in Canada for 2 years

• Temporary residents, work permits, non-residents who are married to residents/Canadians, diplomats and refugees are exempt from this ban

• Exemptions for buildings with more than 3 units, recreational property, foreclosures, and inheritances.

Speculation & Vacancy Tax expansion in BC

• Now that rentals must be allowed in buildings, units that aren’t rented will be subject to the speculation/vacancy tax of 0.5% of the value and 2% for foreign owners per year, plus in Vancouver, 3% empty home tax annually.

• Pressure to have units rented out if vacant for more than 6 months of the year

• Expanded to more areas such as Squamish, Lions Bay, Ladysmith

If you have any questions about recent changes to the real estate market, contact us!