In an effort to increase the supply of housing by discouraging owners from leaving their residential properties unoccupied The City of Toronto will levy a Vacant Home Tax (VHT) on vacant homes.Who’s impacted? A home will be taxed if unoccupied for a total of six months during the previous calendar year or if it is deemed unoccupied under the by-laws. Go Deeper.
2) Foreign Buyer Ban
The Purchase of Residential Property by Non-Canadians Act bans non-Canadians from purchasing residential real estate in Canada between January 1, 2023, and December 31, 2024.
Who’s impacted? Foreign corporations and individuals who are not permanent residents of Canada or Canadian citizens.
Property Types Impacted: Detached Homes with three dwellings/units or less. Townhomes, condominiums, and other properties are to be listed in additional regulations.
Exceptions include Refugees, individuals whose spouse or common-law is a Canadian citizen, a permanent resident of Canada, a person registered as an Indian under the Indian Act or certain temporary residents.
3) New Anti-Flipping Tax Law
Effective January 1, 2023, any profit from the sale of a property, including rental property within a 12-month period will be taxable as business income and ineligible for either the principal residence exemption or the 50% capital gains rate.
The rules will extend to assignment sales meaning if you sell a property you purchased pre-construction. GST/HST has been applicable to the assignment sales as of May 7, 2022.
The Bottom Line: If you plan on flipping property in less than 365 days expect to pay the full tax on your profits in the New Year.
Post Your Comment: