Canada's new rules to prevent flipping of residential real estate: These regulations are intended to reduce speculative demand in the marketplace and slow down excessive price growth. Under these rules, homeowners will not be able to use the Principal Residence Exemption (PRE) to avoid paying taxes on the sale of their home if they've owned it for less than 12 months (365 consecutive days). The gain will be fully taxable as business income, with exceptions for certain situations such as death, disability, separation, and work relocation. Flipping is defined as "purchasing real estate with the intention of reselling the property in a short period of time to realize a profit." To qualify for the PRE, certain requirements must be met, such as actually owning the home and living in it for at least part of the year.
Two-year ban on foreign buying of residential real estate in Canada: Non-Canadians are prohibited from purchasing residential real estate in Canada for two years. This includes individuals who are not Canadian citizens or permanent residents, foreign corporations, and corporations that are not incorporated in Canada or controlled by foreign corporations or individuals who are not Canadian citizens or permanent residents. Exemptions are provided for refugees, individuals purchasing property with a Canadian spouse or common-law partner, and temporary residents who meet certain conditions. Anyone, including realtors, who "knowingly...counsels, induces, aids or abets" in a contravention of the act by a non-Canadian, or attempts to do so, will be guilty of an offense and liable to a fine of up to CA$10,000.
Vacant Home Tax in City of Toronto: A new by-law requires every homeowner in the City of Toronto to make a declaration regarding their property status. The deadline for this declaration is February 2, 2023, and failure to make a declaration can result in fines of $250.00. Properties that are not declared may be subject to the Vacant Home Tax, which is 1% of the Current Value Assessment for each taxation year. Options for declaration include occupancy as a principal residence of the homeowner, occupancy as a principal residence of a permitted occupant, occupancy as a tenanted property, or vacancy with an eligible exemption.
The information provided here is intended for general reference and should not be considered as advice or an opinion to be relied upon in specific situations. For guidance on how the law applies to a particular case, it is recommended to seek professional advice. Our brokerage cannot be held responsible for the content of other websites. We do not accept any liability for actions taken or not taken based on information received from a website linked to our brokerage. The presence of a link to another site should not be interpreted as an endorsement of the host, the site, or the information contained therein, nor should it be considered as an association or affiliation with the host.