A brief overview and what you need to know about the NEW REAL ESTATE RULES IN CANADA!
Be aware that the Federal and Provincial governments are making significant policy changes that will affect our real estate market that may impact you as a buyer or seller.
I’ll only outline briefly the three changes but the first one which is already in effect.
Removal of BC’s Age and Rental Restrictions on all Strata Titled Properties
Last week, the Government of B.C. announced changes to legislation that will remove rental and age restrictions in all strata properties and introduced the new Housing Supply Act which will provide select municipalities with increased powers to address housing development. This will not affect the short-term rental market nor those properties for senior (55+). These changes came about due to the many empty strata properties in BC that could not be rented out. It is the governments hope that these changes will enable owners to rent out their much-needed properties. Note, these changes really have very little affect, if any, on our current strata properties in our valley.
For more information visit HERE!
Home Buyer Rescission Period (HBRP) or ‘cooling off period’ in BC
The HBRP, commonly known as a “rescission period,” gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. This allows buyers the right to change their minds within a prescribed period and therefore cancel a contract of purchase and sale with little consequence. Without a rescission period, a buyer is not protected if they wish to terminate an unconditional contract and potentially face legal ramifications. With this new rule, buyers are now given a small amount of time to do their due diligence.
The new Act and its regulations establish a buyer’s right to rescind or cancel a contract of purchase and sale for residential real property within 3 clear business days after final acceptance (starting on the next business day after an offer is accepted and excludes Saturdays, Sundays, and holidays in BC). If a buyer chooses to invoke their right of rescission within the rescission period, they must serve the appropriate notice and then the buyer must pay to the seller 0.25% of the purchase price in compensation (For example a $1.5M properties penalty to rescind is $3750).
There are of course narrow exemptions to the Act. These include:
• Sale of residential real property located on leased land
• Sale of leasehold interest in residential real property
• Residential real property that is sold at auction
• Residential real property that is sold under a court order or the supervision of a court
• Sales by way of Assignment of Contract
• Pre-construction sale of multi-unit development properties which are already subject to a 7 day rescission period
This may or may not affect your property purchase so, it is important to understand this new rule when buying or selling.
Canada’s Foreign Buyer Ban NOTE: THIS NEW POLICY DOES NOT AFFECT THE EAST KOOTENAY REGION!!
Starting January 1 2023, non-Canadians will be banned from buying homes across Canada, through the Prohibition on the Purchase of Residential Property by Non-Canadians Act. This Act prohibits non-citizens and non-permanent residents from purchasing residential property in Canada for two years.
The Act also restricts non-Canadians from avoiding the ban by using corporations or other entities to purchase residential property. Both the non-Canadian purchaser of prohibited property and any person or entity that knowingly assists in the purchase can be fined up to $10,000 and the property may be forced to be sold.
At this point, there is still a lot we do not know about the Act because details have not been announced through regulation. There may be exemptions for certain groups of people, types of residential property (i.e. Vacation property), and special circumstances, but these have not yet been established. The final regulations are intended to be published soon.
Source page read HERE!
Anti-Flipping Tax Rules for Canada
To help in further cooling off the excessive price growth and reduce speculative demand of Canadian real estate, the government of Canada is proposing anti-flipping rules that are expected to come into effect January 1, 2023. The new tax law will disallow the use of the principal residence exemption to shelter the capital gain realized on the sale of your home if you’ve owned it for less than 12 months, allowing for certain exemptions such as death, disability, separation, and work relocation. Instead, the gain will be 100 per cent taxable as business income.
I thought this article explains this rule well:
Note: The material outlined in this ‘blog’ should not be taken as legal advice or opinion. The information provided is for your awareness and does not cover every possible legal remedy or right. The laws may change again over time and therefore should be interpreted in the context of the circumstances. Readers should consult a legal professional for advice.