Double Edged Real Estate Legislation Came Into Effect January 1, 2023 & What You Need to Know

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.

This legislation will force homeowners to keep their homes for a minimum of 12 months (365 days) if they wish to use the primary residence tax exemption or be faced with their sale being taxed as business income rather than capital gains income. There are a few common-sense exemptions, namely; pregnancy, death, employment change, divorce, disability, etc., 

This is a full-blown prohibition on Residential Property Purchases by non-Canadians for two years. The Act carries a potential $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian who is convicted of violating the Act. 

This will affect: Any non-Canadian as defined in the Prohibition on the Purchase of Residential Property by Non-Canadians Act.  

It will NOT Affect: 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 Indian Act. Also included are corporations that are incorporated under the laws of Canada. There are further exemptions for temporary residents that satisfy certain conditions, and protected persons under s. 95(2) of the Immigration and Refugee Protection Act. A non-Canadian who intends to purchase residential property in Canada with a spouse or common-law partner that is not a non-Canadian, is also permitted to do so.