Tax and policy changes 2024

B.C.’s BLANKET ZONING CHANGES

3-4 Units in single family zones and duplex zones (apply within urban containment boundaries and municipalities over 5,000 people) Local governments have until June 30, 2024 to accommodate small-scale, multi-unit housing requirements (except in areas where they have applied for an extension).
https://www2.gov.bc.ca/gov/content/housing-tenancy/local-governments-and-housing/housing-initiatives/smale-scale-multi-unit-housing

ANTI-FLIPPING LEGISLATION – GOV OF CANADA

The BC provincial Government introduced the anti-flipping legislation at the end of last month and will apply to all BC properties sold after January 1 2025 for any homeowners who have owned the property for less than two years. If you are affected, 20% of the gain you derive from the sale could be taxable.

Here are all the in-depth details:

https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax

This new BC tax is in addition to, and does not harmonize with, the Federal Government flipping legislation – Since 2023, the gain from homes re-sold in under 365 days could be considered business income and capital gain exemptions won’t be available…

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/r esidential-property-flipping-rule.html

FOREIGN BUYERS BAN – GOV OF CANADA

As part of using all possible tools to make housing more affordable for Canadians, the ban on foreign ownership of Canadian housing, which is currently set to expire on January 1, 2025, will be extended to January 1, 2027. Foreign commercial enterprises and people who are not Canadian citizens or permanent residents will continue to be prohibited from purchasing residential property in Canada. Penalties are severe.

SPECULATION AND VACANCY TAX – PROV OF BC
Expanded in 2023 to include the North Okanagan

The tax rate is based on assessed values and calculated: 2% for foreign owners and satellite families and 0.5% for Canadian citizens or permanent residents of Canada. The speculation and vacancy tax applies based on ownership as of December 31 each year, is based on a calendar year, and the tax is payable the following July – with your property taxes.

Home owners in affected areas will receive notices and must promptly file an exemption if applicable.

The City of Vancouver also has an ‘empty house’ tax that is in addition to the above!

UNDER USED HOUSING TAX (UHT ) GOV OF CANADA

The Underused Housing Tax is an annual federal 1% tax on the ownership of vacant or underused housing in Canada that took effect on January 1, 2022.

The tax generally applies to foreign national owners of housing in Canada. However, in some situations, this tax also applies to some Canadian owners (such as certain partnerships, trustees, and corporations).

Find out if you are an affected owner of this tax – see the link below or seek advice from your accountant! – Unaffected owners don’t have to file any documents.

https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/who-file-pay.html#determine

SHORT TERM RENTAL RESTRICTIONS (STR) – PROV OF BC – MAY 1 2024

Short term rentals, anything less than 30 days, are no longer allowed with few exemptions. Ski Resorts and some resort towns are exempt. Strata Hotels and fractional ownership units are only exempt if the owner cannot use the unit as a principal residence due to mandatory provisions in a rental pool or fractional ownership agreement. Licensed B & B’s are only exempt if it is also the owner/operator’s principal residence!

PLEASE READ IF YOU ARE OPERATING ANY SHORT-TERM RENTALS! Very significant fines will be assessed after May 1 of this year: https://www2.gov.bc.ca/gov/content/housing-tenancy/short-term-rentals

CAPITAL GAINS TAX

The 2024 Federal Budget proposes to increase the capital gains inclusion rate for capital gains realized on and after June 25, 2024, from 50% to 66.67% for corporations and trusts and from 50% to 66.67% on the portion of capital gains realized in the year that exceed $250,000 for individuals.