Newsletter

Provincial and Federal Changes and How that will Affect You

The Federal and Provincial Governments have introduced several new rules that may impact buyers, sellers and homeowners.

The Federal Government has introduced a 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 family 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% of the costs to a maximum of $7500. 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 repairs or maintenance costs, household appliances and devices and landscaping or security services. Expenses must be supported by receipts.

Another new Federal Tax Change is the 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 ANTI 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% capital gains rate or the principal residence exemption. Exemptions include:

household addition such as a birth or adoption,

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. For specific details as to how these changes may impact you, please consult your tax accountant.

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 for two years.

The Provincial Government’s new HBRP (Home Buyer Rescission Period) came into effect on January 3, 2023. This provincial policy gives buyers the right to withdraw from a purchase agreement within three business days of an offer being accepted. For more information on the effect this could have on a purchase or sale of your property, please contact me.