2022 was a wild ride. From the Bank of Canada raising their policy interest rate from 0.25% in March to 4.25% in December and sweeping regulatory changes across the sector here's a summary of the most notable real estate stories of 2022.
The Government introduced an anti-flipping tax, the Home Buyers Rescission Period and a foreign buyers ban as well as expanding the areas included in the Speculation and Vacancy Tax.
Of all the changes that were to come into effect, the one that created the most uncertainty for Whistler real estate agents and investors was the foreign buyers ban. When the details were released we found out that Whistler, Pemberton and other communities located outside of a Census Metropolitan Area (CMA) or a Census Agglomeration (CA) are excluded from this prohibition.
The Speculation and Vacancy Tax (SVT) areas were expanded and now include Squamish and some other small communities. The full list of areas that are affected by the SVT can be found here.
The Home Buyers Rescission Period (HBRP) that now affects most residential property allows for HBRP gives buyers the right to rescind their offer up to three business days after the offer is accepted. If a buyer changes their mind within that period, they must pay a 0.25 per cent rescission fee to the seller. Properties that the HBRP does not affect are:
- Residential leasehold properties / residential real estate on leased land;
- Residential real property that is sold at auction; and
- Residential real property that is sold under a court order or the supervision of a court.
The anti-flipping tax clarified previous legislation, and not deems any property sold within 365 days ownership to be 'flipped' and would be taxed as business income and ineligible for either the 50 per cent capital gains rate or the principal residence exemption. There are exemptions to this, such as qualifying life events, like death or divorce, for more details we recommend you talk to you tax professional.
Sources:
BCREA - Foreign Buyers Ban
BCREA - New Federal Tax Changes