January 6, 2023 | Real Estate News
Canadian Housing Initiatives To Expect In 2023
The Canadian government introduced several new housing policies this year. Some took effect on January 1st. Others arrive this spring. Overall, here’s a breakdown of the key Canadian housing initiatives to know.
Two-Year Ban on Non-Canadians Purchasing Residential Property
The government released this two-year ban’s regulations on December 21, 2022. Specifically, the regulations define key terms, outline exceptions, and explain enforcement. For more detail, we cover this ban in full here.
Residential Property Flipping Rule
This rule applies to residential properties sold on or after January 1st. As a result, it taxes profits from property flipping in full. More specifically, the sale of a residential property owned for less than 12 months now counts as business income. This includes rental properties, too.
How “Flipped Property” Is Defined
Bill C-32 defines a “flipped property” as a housing unit in Canada that the owner held for less than 365 consecutive days before selling it. For a full breakdown, the Government of Canada explains the rule here.
Multigenerational Home Renovation Tax Credit
This refundable tax credit lets families claim up to $7,500. In turn, households can use it to build a secondary unit for an older family member or a person with a disability. For complete eligibility details, see the full program here.
Tax-Free First Home Savings Account (FHSA)
The government is working with financial institutions to launch the FHSA in 2023. Once it launches, people buying their first home can open an account and start contributing. In fact, experts expect this measure to take effect in April 2023.
How Much You Can Save With an FHSA
The FHSA lets first-time buyers save up to $40,000 tax-free. Additionally, it sets an annual contribution limit of $8,000. For the complete details, read the full FHSA breakdown here.
What This Means for You
Altogether, these Canadian housing initiatives aim to improve affordability and support people buying their first home across the country. So, have questions about how they affect your own plans? Our team can walk you through what applies to you.
They include four main changes. A two-year ban on non-Canadians purchasing residential property. A tax rule on property flipping. A tax credit for multigenerational renovations. And a new Tax-Free First Home Savings Account.
It taxes profits from residential properties sold within 12 months of purchase as full business income, including rental properties, for sales on or after January 1, 2023.
Families can claim up to $7,500 to build a secondary unit for a senior or an adult with a disability.
The government expects the FHSA to take effect in April 2023.
First-time buyers can save up to $40,000 tax-free, with an annual contribution limit of $8,000.
You May Also Like
- Need To Know: Canada’s Foreign Buyers Ban
- First-Time Home Buyer Guide in Ontario
- Ontario Home Buyers Guide for 2026: Opportunities, Risks, and Smart Strategies
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