Housing Starting January 1, 2023. Government of Canada
Anti Flipping Tax - Crack down on house flipping by ensuring that profits from properties held for less than 12 months are fully taxed, starting in 2023, with certain exceptions for unexpected life events (e.g. death, divorce). This measure will ensure that investors who flip homes pay their fair share, and play a role in lowering housing prices for Canadians.
Speculation Tax - down on speculation that contributes to higher home prices by applying the Goods and Services Tax/Harmonized Sales Tax (GST/HST) to all assignment sales of newly constructed or substantially renovated residential housing, effective May 7, 2022. An assignment sale is when a house is resold before it has even been constructed or lived in.
Vacant Home Tax - A 1 per cent annual vacant home tax on foreign-owned underused housing, to help free up homes for Canadians to live in, make the housing market more affordable for Canadians, and to ensure that foreign, non-resident owners of Canadian housing pay their fair share of Canadian tax.
Foreign Buyers Ban - A two-year ban on foreign purchases of Canadian houses, effective January 1, 2023, to ensure that houses are used as homes for Canadians to live in—and not used as financial assets for foreign investors. The government recently consulted on regulations that will be brought forward prior to January 1, 2023, to implement the final details of the ban.
Benefits for Buyers in 2023:
Help Canadians save on closing costs by doubling the First-Time Home Buyers’ Tax Credit to provide up to $1,500 in direct support to home buyers, starting in 2022, to offset the increasing closing costs involved in buying a home.
Introduce a new, refundable Multigenerational Home Renovation Tax Credit, to provide up to $7,500 in support for constructing a secondary suite for a family member who is a senior or an adult with a disability, starting January 1, 2023.
Tax-Free First Home Savings Account (FHSA) (sometime in 2023, more to come)
If you contribute $8,000 per year to buy a home, it’s the equivalent of the government offering you a non-taxable gift.
Unlike the HBP, you don’t need to pay back the amount, even if the withdrawals are not used on a down payment for a home. However, those withdrawals will be taxable.