{"id":12607,"date":"2023-01-10T12:29:35","date_gmt":"2023-01-10T12:29:35","guid":{"rendered":"https:\/\/diamondlaw.ca\/?p=12607"},"modified":"2023-01-11T18:29:15","modified_gmt":"2023-01-11T18:29:15","slug":"double-edged-real-estate-legislation-came-into-effect-january-1-2023-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/diamondlaw.ca\/double-edged-real-estate-legislation-came-into-effect-january-1-2023-what-you-need-to-know\/","title":{"rendered":"Double Edged Real Estate Legislation Came Into Effect January 1, 2023 & What You Need to Know"},"content":{"rendered":"
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Important<\/span> changes<\/span> to Canadian Real Estate, Double Edged Sword of Anti-Flipping Tax and Non-Canadian Residential Real Estate<\/span> Purchase<\/span> Prohibition.<\/span><\/span> As of January 1<\/span>st<\/span>, 2023, 2 pieces of legislation have been put into law.<\/span><\/p>\n<\/div>\n

What you need to know:<\/strong><\/h2>\n
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Anti Flipping Tax on Residential Homes Purchases<\/span>\u00a0<\/strong><\/h3>\n<\/div>\n<\/div>\n
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This <\/span>legislation <\/span>will force homeowners<\/span> <\/span>to keep their homes for a minimum of 12 months (365 days<\/span>)<\/span> if they wish to use the primary residence tax <\/span>exemption or<\/span> be faced with <\/span>their <\/span>s<\/span>ale<\/span> being taxed as business<\/span> income<\/span> rather than capital gains<\/span> income.<\/span> <\/span>There are <\/span>a few common-sense exemptions, namely; <\/span>pregnancy, death, employment<\/span> change<\/span>, divorce, <\/span>disability, etc.,<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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Prohibition on the Purchase of Residential Property by Non-Canadians Act<\/span>\u00a0<\/strong><\/h3>\n<\/div>\n
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This is a <\/span>full-blown<\/span> prohibition on Residential Property Purchases by <\/span>non-Canadians<\/span> for two years<\/span>. <\/span>The Act carries a potential $10,000 fine for any non-Canadian or anyone who knowingly <\/span>assists<\/span> a <\/span>n<\/span>on-Canadian who is convicted of violating the Act.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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This will <\/span>affect:<\/span><\/span><\/b> <\/span>Any non-Canadian as defined in the Prohibition on the Purchase of Residential Property by Non-Canadians Act<\/span>.\u00a0<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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It will<\/span> NOT<\/span> <\/span>Affect<\/span><\/span><\/b>: <\/span>Any individual or corporation that falls outside of the definition of non-Canadian. This includes Canadian citizens, permanent residents, and persons registered as Indian under the <\/span>Indian Act. Also included are corporations that are incorporated under the laws of Canada. There are further exemptions <\/span>for temporary residents that satisfy certain conditions, and protected persons under s. 95(2) of the Immigration and Refugee Protection Act. <\/span>A non-Canadian who intends to <\/span>purchase<\/span> residential property in Canada with a spouse <\/span>or common-law partner <\/span>that is not a non-Canadian, is also <\/span>permitted<\/span> to do so.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n<\/div>\n

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Why is this legislation being passed?<\/span><\/h2>\n<\/div>\n
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The intent <\/span>of <\/span>the Canadian <\/span>government<\/span> is to <\/span>help make<\/span> Canadian residential real estate <\/span>more affordable for people living in Canada<\/span> by limiting access to non-Canadians, and <\/span>to more accurately tax the<\/span> serial \u201cHouse Flippers\u201d<\/span> who have been utilizing the \u201cPrimary residence\u201d loophole <\/span>in order to<\/span> <\/span>reduce the amount of taxes they <\/span>paid a<\/span>fter flipping a property<\/span>.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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How will this affect the average Canadian?<\/span><\/span><\/b>\u00a0<\/span><\/h2>\n<\/div>\n
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In general, the average Canadian <\/span>does not need to be concerned, as the prohibition will not affect their ability to <\/span>purchase<\/span> property in Canada. Canadians who are looking to sell a property within <\/span>365 days of purchase, should be aware that they may be paying more in taxes <\/span>as a result of<\/span> the new legislation. Our <\/span>suggestion <\/span>is<\/span> to contact an accountant<\/span> or a financial professional<\/span> to <\/span>provi<\/span>de<\/span> advice on taxes <\/span>whe<\/span>n selling a property.<\/span><\/span>\u00a0<\/span><\/p>\n<\/div>\n

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Will this cause a <\/span>significant change<\/span> in the real estate market<\/span>?<\/span> (Speculative Opinion \u2013 Not Legal Advice)<\/span><\/span><\/b>\u00a0<\/span><\/p>\n<\/div>\n

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Whereas the intent of the legislation is to <\/span>make housing more affordable to Canadians<\/span>, <\/span>only time will tell <\/span>whether or not<\/span> the<\/span> <\/span>legislation <\/span>will<\/span> <\/span>impact<\/span> the <\/span>C<\/span>an<\/span>a<\/span>dian<\/span> market. <\/span>I<\/span>f<\/span> <\/span>you\u2019re<\/span> unsure of the implications of this legislation on your transaction, the best path is to seek professional advice.<\/span><\/span>\u00a0<\/span><\/p>\n\t

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Important changes to Canadian Real Estate, Double Edged Sword of Anti-Flipping Tax and Non-Canadian Residential Real Estate Purchase Prohibition. As of January 1st, 2023, 2 pieces of legislation have been put into law. What you need to know: Anti Flipping Tax on Residential Homes Purchases\u00a0 This legislation will force homeowners to keep their homes for…<\/p>\n","protected":false},"author":1,"featured_media":12610,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"ngg_post_thumbnail":0,"footnotes":""},"categories":[820,9],"tags":[],"class_list":["post-12607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diamond-diamond-news","category-media","entry"],"_links":{"self":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/12607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/comments?post=12607"}],"version-history":[{"count":0,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/posts\/12607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media\/12610"}],"wp:attachment":[{"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/media?parent=12607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/categories?post=12607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/diamondlaw.ca\/wp-json\/wp\/v2\/tags?post=12607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}