Happy New Year - 2023 and Welcome to Some Federal Tax Changes for Homeowners

Thinking of buying or selling real estate in 2023?  There has been a few new Federal tax changes to know about as well as the new residential property rule for individuals who purchase a residential property and sell it withing 12 months of their purchase (not many do but always good to know the changes)... may be subject to the 'Residential Anti-Flipping Rule'.  Under the new rules, any profit from the sale of residential real estate (inluding rental property) would be taxed as business income and ineligible for ether the 50 percent capital gains rate or the principal residence exemption.  There are some exemptions... a household addition such as birth, adoption or care of an elderly parent also if there is a marriage or common-law partnership breakdown, threat to personal safety, change in employment, insolvency or involuntary disposition, such as from a natural or human-caused disaster.

As of January 1, 2023 the Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyers Ban) is in force.   

• Does not apply to Canadian citizens or permanent residents.
• Applies to Non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
• Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
• Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
• Establishes penalties for non-compliance applicable to Non-Canadians, as well as any person or entity knowingly assisting a Non-Canadian in violating the prohibition.  Click here for more detail.

I hope this helps a little for now and best to discuss with your accountant and/or lawyer.  If you would like any help listing or on the buying side please call Brenda direct 250.744.4556  Wishing all a healthy New Year and a warm personal thank you to Kate Campbell for drawing the ad above... Cheers to all!