Noteable Mentions

Anti-Flipping Tax
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On January 1, 2023 the Federal Government introduced a new anti-flipping tax measure that will impact individuals looking to sell their homes or residential rental properties. This new law will apply to property sold on or after January 1, 2023.

The new measure will tax the profits of a home or rental property that has been held for fewer than 12 months before sale as business income. However, if you sell your property because of a change in life circumstances, you may be eligible for an exception from this tax.

WHAT CLASSIFIES AS FLIPPING?

Property flipping is when a home seller (the “flipper”) purchases a home and sells it within a short period of time with the intent of making a profit over the original purchase price. In some cases the flipper will renovate the property in an attempt to maximize the property’s resale value, though this is not strictly required to meet the definition of flipping.

WHY WAS THIS IMPLEMENTED?

The new anti-flipping tax measures are intended to ensure profits from these types of sales on homes & rentals are subject to full taxation as business income. The new measures aim to reduce speculative demand, which aims to bring down the high cost of the housing market and make housing affordable for more Canadians.

WILL IT WORK?

In my opinion, no! In 2021, Foreign buyers made up 1.1% of home sales in BC. Yes, we were in the middle of a pandemic and borders weren`t fully open, but home prices still surged during this time. It`s simple economics; there aren`t enough homes to fulfill the demand of active buyers and new residents entering our province. The Provincial and Federal governments can implement laws to slow the market for short periods, but until we can build enough homes for this demand, we will always end up right where we started!

For more details or for any questions, hit me up! I`m always here to help!
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Market Update - January 2023
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Coming out of the holiday season, January remained quiet as sellers and buyers were awaiting the upcoming Spring market. January sales did fall about 55% vs last year and compared to December 2022, sales were down about 21% bringing the month`s sales 42.9% below the 10 year average.
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Though sales were down again, new home listings were also down by 20.9% compared to January last year, but rose about 173% vs last month. Although a large increase vs December, there is still a lack of inventory, which has already played a big role as we are starting to see multiple offers on homes outside the city.

The condo market saw sales fall in all areas in Greater Vancouver. Benchmark pricing went down by 1.1% from January 2022 and pretty much held, down only 1% versus last month. Over the past year, condo sales were down 56.6% vs January 2022.

Benchmark pricing for townhomes and 1/2 and actually increased by 0.8% over last month and had a 3% decrease over January 2022. Sales for these property types also decreased over 55.2% vs last year.

Detached homes also fell about 9% in benchmark pricing from January 2022 as sales also decreased over 52.6% during that time period. Over last month, benchmark pricing was down only 1.2%, as homes are starting to flatten as inflation starts to recede.
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February activity has seen a huge jump, especially outside Vancouver where larger corrections occurred. Mortgage rates just increased, but will now stabilize so we should see an influx of buyers jumping back into purchase mode. The latest rate hike was .25% which will again affect consumers` buying power, but the market activity has spiked and we anticipate it will continue to strengthen! With the new immigration policy implemented for the next 2 years welcoming more permanent residents to Canada, this demand will continue to increase so new inventory is needed ASAP to fulfill the demand!
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Message me to chat about your options or go to www.vancity4sale.com to search for homes!
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Federal Foreign Buyers Ban is in Effect

For a period of two years starting January 1, 2023, non-Canadians are banned from purchasing homes in Canada under the definition of “residential property” indicated in the legislation and associated regulations that the federal government published on December 21, 2022.

How does the Foreign Buyers Ban Impact REALTORS®?

REALTORS®, along with lawyers and notaries, have an obligation to inform their clients. The legislation does not rely on REALTORS® to enforce the prohibition. However, REALTORS® who knowingly assist a non-Canadian in contravening the prohibition can be found guilty of an offence and liable on summary conviction to a fine of up to $10,000.
Importantly, REALTORS® do not have any information collection, processing or reporting requirements. REALTORS® should still engage in due diligence as a measure of risk mitigation. To support REALTORS® with their due diligence, the Canadian Real Estate Association (CREA) has developed a certificate: Certification and Consent of Purchaser.

The certificate should be completed before assisting or advising a potential purchaser and it should be used in combination with other due diligence practices. Such practices may include reviewing and keeping a record of the purchaser’s valid and current identification (such as a passport) to determine the purchaser’s citizenship, residency or exempt status.

The key difference between the completion of this certificate and the Know Your Client FINTRAC Regime’s requirement to ID your client at the time of transaction is that with the Foreign Buyers Ban, REALTORS® should ID clients before assisting or advising them on the purchase of a property.

Exemptions

Exceptions exist for international students, temporary residents, specifically exempted foreign nationals and refugee claimants, subject to varying conditions, such as tax filing and residency obligations.

Posted by British Columbia Real Estate Association

For more info, hit me up!

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