Contact

IMPORTANT THINGS TO KNOW - REAL ESTATE WISE- IN 2023

(January 04, 2023 )

Happy New Year to you & family!

Thank you for your continued support and for being part of our success in the past. And we look forward to assisting you and those close to you, for all your real estate needs, heading into 2023. It's truly a pleasure to serve!

As part of our continued service to you, we wish to keep you informed of the recent developments that have come into effect in 2023 that will impact real estate, particularly residential real estate.

British Columbia – Residential Properties

Effective January 1, 2023:

BRITISH COLUMBIA THRE DAY RECISSION PERIOD (Cooling off Period):

Key Points:

Mandatory as of January 3, 2023.

Buyer(s) will have (3) business days to back out of residential purchase after signing the contract.

It applies to most residential real estate contracts, regardless of subject conditions. There are some exceptions e.g. (leasehold residential properties, a leasehold interest in residential real property, properties sold at auction or under a court order, presales are some noted exemptions. For more information: https://bit.ly/3VInABg

The rescission is mandatory and cannot be waived.

Buyer(s) who back out of a contract within this 3 day period will have to pay a rescission fee of 0.25% to the Seller. E.g. on a $1 million home, they'd be required to pay the Seller(s) $2,500.00.

The rescission fee is paid to the Seller(s).

The enforcement of the mechanism for the rescission fee, and for any deposits that may need to be returned, is unclear at this time. We plan to advise our Seller clients for the rescission fee to be accompanying any offer to/with the Contract for the property.

Realtors® must provide general information regarding the rescission period to all clients through the Disclosure of Representation in Trading Services beginning January 3, 2023.

If a deposit is held in trust, brokerages may release it upon Notice of a Buyer’s rescission (less any recession fee owed to the Seller(s)).

If there is a balance, it’s returned to the Buyer(s), regardless of what’s provided in the contract.

Homebuyers must serve rescission Notice to the Seller(s) through registered mail, fax, email with read receipt, or personal service. This can be facilitated via the Buyer’s Realtor® if instructed by the Buyer(s). Note: at this time read receipt may be the other party’s acknowledgement via email of receipt of the Notice.

Notice must contain the address, PID or description of the property, the names and signature of the Buyer(s), name of the Seller(s) and date of the Notice.

This rule was contemplated and put into effect in response to the accelerating residential real estate market both in units sold and increased prices over the past few years. A good rule perhaps, however, since the residential real estate market has changed the timing of this mandatory law/rule will likely be moot, in the current real estate market, and cumbersome to carry out.

HOMEOWNER GRANT – Municipal B.C.

Regular grant:

The regular grant amount is $570 for properties located in the Capital Regional District, the Metro Vancouver Regional District and the Fraser Valley Regional District. For all other areas of the province the amount is $770.

If your property is assessed below the threshold and you meet certain requirements, you will receive the full regular grant amount. Properties assessed over the threshold may receive a partial grant (learn about the grant threshold).

Property owners must pay at least $350 in property taxes to help fund services such as road maintenance and police protection. This amount may be less if you qualify for the home owner grant as a senior, veteran or person with a disability. Your grant amount may be adjusted to ensure the minimum amount of annual taxes are paid.

The grant threshold is the maximum value of an assessed or partitioned property where home owners are eligible to claim the full home owner grant.

Note: the grant threshold for 2023 is $2,125,000. You may be able to claim the full regular grant amount if your property has an assessed or partitioned value of $2,125,000 or less.

If you meet all requirements but your property’s assessed or partitioned value is over $2,125,000, you may qualify for a grant at a reduced amount.

The grant is reduced by $5 for each $1,000 of assessed value over $2,125,000. This means properties assessed up to $2,239,000 ($2,279,000 in a northern and rural area) can receive a partial regular grant. For the additional grant, properties assessed higher than $2,294,000 ($2,334,000 in a northern and rural area), are not eligible for a home owner grant.

Partitioned value:

Partitioning your property value may enable you to claim the home owner grant if:

·You previously couldn’t, or could only claim a reduced grant, because of the high assessed value of your property, and

·Your property consists of your principal residence and at least one separate residence

You can apply to have the assessed value of your property partitioned using the Home Owner Grant Partitioning application.

The partitioned value of a property is the property’s assessed value divided by the number of residences on that property. To qualify, each residence must have cooking, sleeping, bathroom and living room facilities.

Laneway homes and multi-family dwellings like a duplex, triplex and fourplex qualify as separate residences.

Note: A suite in your principal residence doesn’t qualify as a separate residence.

Canadian Federal – Residential Real Estate

Effective January 1, 2023

RESIDENTIAL FLIPPING TAX:

The federal government has brought in a two-year home sale flipping tax, which was recently extended to include assignment sales of new homes.

The tax kicks in when a home or assignment is bought and sold within one year, unless disqualified by divorce or death. Any profit on the flip would be taxed as business income and would not qualify for the 50 per cent capital gains exemption.

For further details: https://bit.ly/3Q9wEhv

TWO YEAR BAN ON FOREIGN HOME BUYERS:

The federal government’s ban on new foreign ownership of residential property becomes law on January 1, 2023, disallowing anyone who isn’t a Canadian citizen or permanent resident from buying residential real estate for two years.

During this period, the federal government plans to work with provinces and municipalities to develop a framework to better regulate the role of foreign buyers in the housing market to ensure housing is available for and used by Canadians.

For exemptions and further information: https://bit.ly/3Cla27I

Our warmest wishes,

Sheryl, Alice and Mark

IMPORTANT THINGS TO KNOW - REAL ESTATE WISE- IN 2023

Categories

Archives