Opening the Door to Fraser Valley Real Estate
Changes to Real Estate in 2023
Residential Flipping Rule
Any profit from the sale of residential real estate within 12 months will be taxed as business income and ineligible for the 50% capital gains rate or the principal residence exemption.Exemptions include:
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- household addition, such as birth, adoption, or care of an elderly parent,
- breakdown of a marriage or common-law partnership,
- threat to personal safety, such as domestic violence,
- change in employment,
- insolvency, or
- involuntary disposition, such as from a natural or human-caused disaster.
Multigenerational Home Renovation Tax Credit
This tax credit for families applies to eligible construction costs for those who wish to add a secondary unit to their home to allow an immediate or extended family member to live with them. To be eligible, the renovation must be completed in the owner’s primary residence where they live with a senior or disabled person. The tax credit covers 15 per cent of costs to a maximum of $7,500. Eligible expenses would include the cost of labour, building materials, equipment rentals and permits. Non-eligible expense examples include furniture, construction and equipment tools, routine repair or maintenance costs, household appliances and devices and landscaping or security services. Expenses must be supported by receipts.
Home Buyers Rescission Period
From January 3, 2023, the HBRP provides buyers an opportunity to rescind their contract to purchase certain residential properties for up to 3 business days after an offer is accepted with a financial penalty. If you choose to exercise your rescission right, you must pay the seller an amount equivalent to 0.25% of the purchase price.
Foreign Home Buyers Ban
Since January 1, 2023, non-Canadians are banned from buying residential property across Canada for 2 years.Exceptions exist for international students, temporary residents, specifically exempted foreign nationals and refugee claimants, subject to varying conditions, such as tax filing and residency obligations.Properties located outside of a Census Metropolitan Area (CMA) or a Census Agglomeration (CA) are excluded from this prohibition.An order requiring the residential property be sold may be sought if certain conditions are met, namely the non-Canadian is the owner at the time the order is made, and notice requirements have been met.
Certain aspects of the Foreign Buyers Ban still lack clarity, including the exemptions. Under CREA's jurisdictional leadership, we are actively engaged in ongoing dialogue with federal policymakers, legal experts, Statistics Canada, the Canadian Mortgage and Housing Corporation and other stakeholders for clarification on the ambiguities.
