REAL ESTATE NEWS

The Home Buyer Rescission Period (HBRP) will come into effect on January 3, 2023.

Under this new regulation, some buyers for some residential properties will have three clear business days to change their mind, for any reason, and walk away from an accepted Contract of Purchase and Sale.

If a property is not exempt and falls within the definition of a residential property under the Home Buyer Rescission Period Regulation,a buyer will have the right to rescind the contract by providing a Notice of Rescission to the seller, at the address provided by the seller, within three clear business days after the date on which the contract is created. Should a buyer exercise their right to rescind the contract, they will be required to pay a rescission fee, in the amount of 0.25% of the purchase price, to the seller.

If a buyer exercises their rescission right and a deposit has been paid with the offer, the rescission fee will be paid to the seller from the deposit and the balance of the deposit, if any, will be paid to the buyer without further direction from the parties to the contract. A written release from the parties is not required, and the brokerage can pay out the deposit. If there is no deposit paid with the offer, the buyer will be required to pay the rescission fee to the seller.

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Prohibition on the Purchase of Residential Property by Non-Canadians Act

Starting in January 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 federal government has still not released the supporting regulations for the foreign buyer ban. The regulations are expected to include definitions, exceptions, and enforcement elements to help REALTORS® and their clients understand and comply with the law. Below is a description of what we do know:

The Act 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.

“Residential property” includes detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, strata units or other similar premises.

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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.

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Residential Property Flipping Rule

Individuals who purchase a residential property and sell it within 12 months of their purchase may be subject to the Residential Ant-Flipping Rule. Under the new rules, any profit from the sale of residential real estate (including rental property) within a year would be taxed as business income and ineligible for either the 50 per cent capital gains rate or the principal residence exemption.  

Exemptions include:

• 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

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On November 24, 2022, the BC Government passed amendments to the Strata Property Act. There are two significant changes impacting strata properties.

1. All rental restriction bylaws are removed, except for bylaws restricting short-term rentals such as Airbnb or Vrbo

2. All age restriction bylaws are removed, with the exception of “seniors only” (55-plus) rules. This means that a strata will no longer be allowed to have 19-plus age restrictions.

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